
Sad Day For Microsoft: 5,000 Laid Off, Earnings And Revenues Down  - prakash
http://www.techcrunch.com/2009/01/22/sad-day-for-microsoft-5000-laid-off-earnings-and-revenues-down/
======
wastedbrains
I am just not really surprised. Their tech is just not the best in any
category.

I hosted on windows server, now Linux I had my PC on windows, now I run OSX
and Linux. I had a pocketpc phone which killed the palm and then completely
stopped innovating and was in some cases still very buggy, now I have an
iPhone. I used Office, then switched to open office and now 80% google docs. I
have never liked MS browsers, Firefox all the way. I can't think of a single
web property from MS I use...

With them loosing all the developers, developers, developers... It doesn't
take long until they start to loose people that are leading everyone elses
technology choices.

(I admit visual studio is pretty sweet, but I use Ruby)

~~~
potatolicious
I was just about to say that. About the only MS product I actually _like_ (as
opposed to use out of necessity) is Visual Studio. It's the only one that
keeps innovating and has a feature set ahead of much of the competition.

Well, I gues add Xbox to the list. MS came into the market and beat Sony on
features fair and square, and built up a whole new meaning for online
multiplayer. Good for them. If only their Windows and Office teams were half
as innovative.

~~~
arockwell
Xbox Live is the only truly innovative product I can think of that MS has put
out in quite a long time. And even Xbox Live is getting pretty old.

~~~
mlLK
I think I read somewhere that these days the 360 is more profitable than their
OS or any of their software. I liked Live, but never really thought it was
worth it since a majority of the games that included a multiplayer feature
either hit or miss, while most missed. i.e. Halo (anyone of them) all hit.
Star Wars BattleFront (anyone of them), all missed.

~~~
potatolicious
It's really the social aspect of Live that is the most innovative. While most
people were still playing with server lists and friends lists, MS had a way
for you to log in and instantly jump into a game that your friend is playing.
You could even tell _what_ they were doing inside each game (e.g. "Tom is on
rescuing the princess in Some Game.")

And the fact that they completely overhauled their interface, added new
features (like Netflix streaming), all while being still ahead of the pack, is
extremely un-Microsoft-like. Usually I expect to see MS innovate only when
they've been soundly beaten by the competition. It's a breath of fresh air.

~~~
mlLK
Very true, although I don't own a 360 I have plenty of friends that do, and
one feature I thought was interesting was how easy it was for my friend (who
is as ignorant about computers and networking as anyone else in the masses) to
manage his home network and files (which was on windows inevitably) through
his 360, which he never knew how or cared about before owning a 360. Another
thing that caught my attention was the content Microsoft made readily
available to 360 users, (as you pointed out, steaming Netflix) from entire
games, free demos, other user profiles, and game stats.

~~~
potatolicious
The only thing that comes close to giving MS a run for its money is,
surprisingly, Steam. I've been playing some Left 4 Dead lately, and the social
features in that game are very compelling, and it stretches over to other
Valve games like Team Fortress 2, and even some third-party titles.

Too bad PC gaming is a bit of a dying industry :(

~~~
jrockway
> Too bad PC gaming is a bit of a dying industry :(

This is a good thing for a number of reasons. One is that there's no need to
have Windows around anymore, meaning that home users can switch to something
more usable, stable, and secure. The other is that game companies will only
have to test two configurations (Sony and Microsoft), instead of the thousands
that they do on PC games. Less QA grunt work == more features, or faster
releases.

I'll concede that FPSes suck on consoles, but considering they all have USB,
there's no reason why you can't connect a keyboard and mouse to them.

~~~
potatolicious
I think Left 4 Dead and Team Fortress 2 have been great examples of why
console multiplayer is still substandard. Both games came out, sold massive
numbers of copies, and naturally some balance problems were discovered.

Valve patched the PC versions almost immediately, and in fact have even added
content to the game in subsequent updates. All of these updates _just_ hit the
360 version days ago. MS is allergic to fast-turnaround updates, and also
allergic to free content updates (it sets a bad precedent for devs who want to
charge for more content).

------
wayne
The Mini-Microsoft blog comments are a good place to read Microsoft employee
reactions to this:
[https://www.blogger.com/comment.g?blogID=7555958&postID=...](https://www.blogger.com/comment.g?blogID=7555958&postID=3728181185969775606)

------
jonursenbach
Perhaps they shouldn't have spent so much money on those shitty ads with
Seinfeld.

~~~
thorax
It's hard to say what the quarter would have been like without a major ad push
in Q3. Maybe the ads were bad, but maybe their revenue would have been worse
without them-- solely from a business perspective, you have to be careful with
statements like that.

For all I know, their advertisement strategy is what saved the company from
needing to lay off 20k in this announcement.

~~~
thomasmallen
Unlikely. Those Seinfeld ads didn't actually try to sell anything. A bit of
overpriced, mild brand reinforcement most likely would not have affected the
company's short-term prospects.

By the way, what M$ is doing here is very screwed up. They're laying off the
first batch (1400) immediately, but using the remaining 3600 as a threat to
make competition cutthroat. I might just quit if I worked there.

~~~
Andys
Wow, that is really sad and not something I would have expected from MS.

~~~
mattmaroon
It's also probably not true. It may happen, but there's no evidence it was
intended that way. Layoffs are often done slowly in tranches.

------
rajat
The headline's a bit misleading, isn't it? Revenues and earnings are not down;
they actually grew, but not as much as expected.

Still looks bad, I guess, compared to Apple (disclosure: I use Apple laptops
and desktops) which reported great numbers. But still, "Earnings and Revenues
Down" is quite a bit different than "Grew Slower Than Expected"; especially in
an economic downturn.

Client revenue declined, which is caused by, I presume, Vista woes. Server,
Tools, XBox revenues all grew.

~~~
fauigerzigerk
That's not entirely correct either. Revenues are indeed slightly up, but
earnings are down: <http://www.cnbc.com/id/28791677>

------
fallentimes
5% really isn't that many. Sounds like a good excuse to cut the chafe.

~~~
zzzmarcus
When 5% means 5,000 people without jobs, it's a lot. I don't work for MS, but
I live in Seattle. I guarantee you every tech company in the area is affected
in some way by this.

Within MS, the uncertainty will be detrimental to the entire culture there
until all they layoffs are done and probably for quite awhile after that.

Outside MS seeing the largest company in town, one that rarely lays people
off, axe so many jobs will have everyone nervous. No matter what your feelings
about MS are, their influence in Seattle (not to mention elsewhere) is huge
and a layoff of this size means a lot.

~~~
fallentimes
I wasn't making a value judgment or arguing against any of the other points
you mentioned.

Headlines often do this. When it's a big actual number and a small percent
they post the actual number. When it's a big percent, but a small actual
number, they post the percent. It's one thing if they're cutting tens of
thousands of jobs and 20% of their work force. But most big corporations are
so inefficient, this feels like a natural layoff/reduce the chafe move. We'll
find out soon enough.

------
tocomment
I see this as resources getting freed to go towards a better use.

~~~
villageidiot
Like what? Flipping burgers?

That "better use" may be elusive for some.

~~~
mynameishere
Some people at Microsoft (or any company) might contribute more by just that.

~~~
tocomment
agreed. Flipping burgers is a net gain for the economy, moving icons around in
the control panel for no reason and confusing people is a net loss :-)

------
RobGR
1.5 billion devided by 5,000 people is $300,000 saved per person let go,
unless I miscounted zeros in doing that calculation.

That seems high, I think usually companies claim savings of around twice the
employees salary when they fire people.

Of course they also mention reducing contractors also, but then they are also
hiring more too.

~~~
sounddust
Microsoft has one of the world's greatest health insurance packages. They also
have one of the best overall benefits package (much better than Google, for
example). They are saving multiple years' worth of salary per employee by
letting them go. And the layoffs have allowed them to cancel/delay the
purchase of several lots of real estate. I actually thought it would be more
than 1.5 billion estimated.

Also, they are apparently laying off a lot of LCA (lawyers) who probably are
very well-paid.

------
rbanffy
Maybe now they will be able to focus on creating competitive software like
they did in the late 80s.

~~~
jjs
> Maybe now they will be able to focus on creating competitive software like
> they did in the late 80s.

I hope not!

I'd much rather eat their lunch while they eat their dogfood...

------
dilanj
Anybody has an idea of the percentage of developers out of that?

~~~
medearis
"Microsoft announced today that it will be laying off up to 5,000 people over
the next 18 months... Microsoft also says that it will continue to hire..."

I don't know what percentage of those are developers, but my guess is that it
will include a significant percentage. Does anyone else see a problem with
this approach to hiring? To me, it seems to reflect a lot of the negative
aspects of the "career" software engineer. After a few years on the payrolls
of mega-corp, you get replaced by someone younger, cheaper and with more
recent knowledge. Perhaps it's inevitable with a competitive labor market...
just kinda sucks if you ask me.

~~~
boris
They can replace you if you are just a coder. If, on the other hand, you work
on an important product, acquire domain-specific knowledge, and know the code
inside-out, then replacing you with someone else will be a lot harder.

Think, for example, about the folks who work on the Microsof's C/C++ compiler.
I doubt any of them need to worry about their job. On the other hand, if all
you did is implemented the Shutdown button for the next release of Windows
then, sure, you can be easily replaced.

~~~
earl
That's both right and wrong. While making yourself valuable to your company is
probably a good idea, you have to be working for an employer smart enough to
realize it. Which is, in my experience, not most large employers.

In the layoffs I've been through, the people let go were almost random WRT how
valuable they were as employees or developers. What was rewarded was managing
up.

------
sgk284
This concerns me... I've got a ton of friends at Microsoft including my co-
founder that is moonlighting with me on a start up (hopefully he won't need
msft for much longer). I don't understand why a company that spends so much
trying to get the best talent in the industry and has as much cash as
Microsoft does would throw a good percentage (5.5%) of their workforce back to
their competitors. Seems priorities are misplaced, not to mention the tons of
negative morale that mass layoffs cause.

~~~
mtkd
Do you not think the competitors are going to have to reduce heads too?

There is some denial amongst the startup community at the moment - this
recession will be very long, very painful and few will be exempt - those that
cut early and cut deep may survive okay - if they have revenue.

~~~
natrius
_"There is some denial amongst the startup community at the moment - this
recession will be very long, very painful and few will be exempt"_

That is not the consensus among economists:
<http://www.voxeu.org/index.php?q=node%2F2785>

IBM expects a good 2009:
[http://www.nytimes.com/2009/01/21/technology/companies/21blu...](http://www.nytimes.com/2009/01/21/technology/companies/21blue.html?scp=2&sq=ibm&st=cse)

~~~
mtkd
IBM and other major hardware companies will still be living off budget spends
that were set in 2007 and 2008 - these will not be reoccuring in 2009.

Enterprises now have vast quantities of surplus desktops and servers because
of redundancies and contraction in the markets they operate (a recession is a
contraction) - whatever you needed 3 servers for in 2008 you only need 2 now.

IBM are also living off the massive defence and security budgets under the
Bush administration - this is all coming to an end. They are in for a very
painful 09 H2 and 2010.

Any tech hardware company who thinks they are exempt from this is off their
heads.

And any economist blogger who thinks this will all be over in 09 H2 is just
whoring for pageviews.

------
edw519
I feel sad for the people but not for Microsoft.

In fact, I could even feel happy faster if Windows would load the page a
little quicker.

------
holygoat
I somehow suspect there would be more comments on this post here on HN if
anonymous comments were allowed.

------
dfranke
Why so many dismayed comments? Hackers should be celebrating. Microsoft and
its products are the antithesis to everything software and software companies
ought to be. We've been waiting decades to see the empire crumble. Now that
it's finally starting, we're worried about a few coders having to go find work
with someone non-evil?

------
sabat
How could this have happened? Ballmer was just so confident. I mean, it was
like yesterday when he was bragging to the entire assembled Redmond staff how
they would "continue to allow others to innovate." Looks like that's worked
out really well for Microsoft.

------
bocalogic
5000 very talented people...MS has enough cash they could have sponsored all
of them in a new venture. what a waste

~~~
ComputerGuru
You're assuming they're "very talented people..." but that's not necessarily
the case. Given Microsoft's size and breadth and the fact that they've been
hiring and not firing all these years, it's to be take for granted that
they've gathered a number of people that are as brilliant and talented as
they'd like over the years... so perhaps this isn't as bad as it seems.

------
known
Microsoft has been hoarding cash instead of reinvesting it.
<http://finance.yahoo.com/q/ks?s=MSFT>

I think it is time to regulate market capitalization (not more than 2 times
quarterly revenue) of all listed companies.

I believe it will enhance entrepreneurship in America.

~~~
fallentimes
There's only so much to reinvest it in. Once you have ample cash reserves,
it's usually best to issue dividends, which is what they've done.

 _I think it is time to regulate market capitalization (not more than 2 times
quarterly revenue) of all listed companies._

You have to be trolling. What about growth companies and growth rates? What
about companies that issue dividends vs. ones that don't? What about _profit
margins_?

~~~
known
I am not trolling.

I stand by my proposal which I believe is

1\. a win-win proposition and

2\. makes America more competitive

~~~
jacquesm
I think your comment score is a typical illustration of people
misunderstanding the use of the 'down' arrow.

