In its first company-wide layoffs, Microsoft plans to fire 1,400 of its employees today and as much as 5,000 over the next year. We know that cuts will eventually come to R&D, marketing, sales, finance, legal, HR, and IT, but information is scarce about what's happening today.
Heard any specifics?
Send us your stories and comments (tips@alleyinsider.com) and/or post them in the comments below. Feel free to call us at 646-747-1539. We'll pick up info as it comes in and add it to this post (most recent on bottom). If you can take some pictures, please send those along, too. We did this when AOL had its huge layoff and when Yahoo had theirs in early December and it made a sad day a bit less depressing.
Ballmer's Memo About Microsoft's Worst Layoffs Ever. From the memo: "The decision to eliminate jobs is a very difficult one. Our people are the foundation of everything we have achieved and we place the highest value on the commitment and hard work that you have dedicated to building this company. But we believe these job eliminations are crucial to our ability to adjust the company’s cost structure so that we have the resources to drive future profitable growth." Read more>
Layoffs handled smoothly so far.
Fred says:
Division presidents and VPs are sending IRM'd (can't forward, reply, print or take screenshots) mail to their teams with details. It's all pretty well organized. Mails have been arriving with regularity starting from SteveB's memo, and then following on with one to managers from HR (short: if you don't know anything, don't speculate), followed by mails from the president of the division, and then the specific group VP.
Camera phone photos, anyone?
Steve preaches optimism. In a conference call to announce earnings and layoffs, Steve sounds optimistic. "I don't think there's any stopping the forward march of our industry or of Microsoft. In the long run, let's call this a pause that's going on in our industry."
The 5,000 people Microsoft plans to layoff does not include outside contractors. An analyst asked the question on a conference call. "We will certainly be looking to reduce that costline more than we're reducing our internal people," says a Microsoft exec.
Microsoft Layoffs To Be Centered On Redmond HQ Bad news for Washington State: Microsoft (MSFT) has about 96,000 employees worldwide, but most of the 1,400 positions being eliminated today will come from the company's Redmond, WA headquarters. Read more>
No More $10 Million Checks To Jerry Seinfeld? Here's one easy way to save on marketing: Stop writing $10 million checks to aging comedians like Jerry Seinfeld, whose "Windows is delicious" antics largely failed to click with consumers. Read more>
Steve isn't expecting a quick rebound. From the conference call: "Our model isn't for a quick rebound. The economy shrinks and then it builds from a lower base. No, I'm not expecting a bounce. When we did our resizing, we did with an eye toward margin, total profit, shareholders in the short term and long term investors. A year, two years -- I don't know what it'll be."
Strong performers not necessarily safe. Today's layoffs aren't just for the bottom 10% performers, a commenter tells us. "I've heard that attrition through "performance management" will be in addition to the layoffs. Today's job cuts are really about reducing investments in projects that don't make sense. Good and bad performers' positions are being eliminated alike, though the good ones will likely find a place somewhere else in the company."
Mini-Microsoft: "Microsoft should be better than this." The anonymous blogger behind Mini-Microsoft says he or she is happy to see Microsoft getting mini-er but not in such a reactive manner.
"Here we are at Microsoft: realigning resources and reducing costs. And laying people off. The day that has been rumored for a month now has come. And the staff reductions I've been wanting since starting this blog back in 2004 are here, though within an economic context I certainly Do Not Want. I wanted intelligent, well-thought-out leadership to have seen long ago that we've doubled our ranks far too fast and exceeded our ranks beyond what we can sustain (let alone need). Yet here we are now, in the choppy waters of the global economic crisis, being reactive rather than opportunistic. Microsoft should be better than this."
Severance details. A commenter on Mini-Microsoft says, "Severence: (<65) 1 week for every 6 months of service. (65+) 2 weeks for every 6 months of service. Capped at 39 weeks."
On life after Microsoft. From Mini-Microsoft comment thread: "Best of luck to everyone in the coming months. I left Microsoft over a year ago for several different reasons. One of which was because I thought the company had become too big for itself and it had become too hard to get stuff done Life outside Redmond has been different and at times more difficult. But at the same time, it has been much more rewarding. While I am 100% certain I made the right decision, I still only wish the best for my old employer and old coworkers. Layoffs are tough, but they often bring new opportunities both for those who leave and those who stay behind."
"Hunting season" starts. From Mini-Microsoft comment thread: "More miBobMu sent his mail ..Eliminitations are in the works .. folks will be notified by EOD message was vague but seemed mostly to focus on "elimination due to products / features which are not supported any more or can be absorbed" Some of the lieutenants have been messaging "manage out low performers" so it is hunting season Merry Xmas.
Low performers will be fired without severance later? From the Mini-Microsoft thread, an employee comments: "There will also be a "performance management" portion, where they lay you off without a severance package. And then there will also be a lot of people who can't bear an axe hanging over their neck and leave voluntarily. I'm certainly contemplating this. 18 months my ass."
Moscow safe, phew. From Mini-Microsoft comment thread: "Few positions to be eliminated in the Moscow office, HR contractors and folks from the MCS."
"Just got the axe today" From Mini-Microsoft comment thread:
Just got the axe today. I am in MCS as an Architect. I had been working on a number of technologies with customers such as Active Directory, Exchange and in some cases Virtualization. Recently the sales cycles have been extended due to customers pulling back on what they had planned to implement. So, a couple of deals that I would have had solid utilization on from a Design perspective fell through.
HR and management told me that it was mainly because of low utilization. It is a shame that I was viewed just by this rather than the value I was adding to the sales teams in helping to win big deals. Fact is, we won the big deals, but the state of the economy is what it is. If you aren't making money for the company from a tangible aspect that is directly tied to you, you will be gone.
Severance was 2 weeks for every 6 months of service. I am a 63.
"Very few, if any, 10 percenters in the bunch." From Mini-Microsoft comment thread: "More than five years with the company. Achieved or exceeded every year. Promoted more than once. Now looking for employment, as is everyone else in my group. The cuts were capricious and thoughtless. Very few, if any, 10 percenters in the bunch."
Laid off for taking a full parental leave? From Mini-Microsoft comment thread:
I am in Services and just got canned today after 11 years with MS and 7 years with Services.
Had Achieved or Exceeded for last 7 years except once (3 years ago) was promoted last year.
3 reasons given: job function, utilization and business need. No details on any.
I was a local expert in sharepoint and workflows. Published to MSDN. Was lined up to speak at TechReady. And had a full time customer billable gig until June 09 lined up
The utilization is an interesting story. I took a parental leave, full 12 weeks. That is supposed to come off your utilization target in a year (essentially take hours supposed to work and subtract 12 weeks). Well, I dug into numbers yesterday and they only appear to have subtracted 8 weeks. That extra month of supposed utilization really skewed my numbers downward. But they didn't want to discuss that discrepancy. My fault for not catching it early, I guess.
So careful with parental leave there. And Services people, watch MyIncentiveComp tool carefully.
I also had my ChangePoint hours messed with last year, one month utilization gone. Caught that just in time.
I think I pissed off my manager sometime last review.... Never clicked with that person...
I think I am the only one out of group of 25 to get canned in this group. I base that on review of the calendar of manager, mine is the only "Private" appointment this week although there was one two days ago, but that's before announcements.
How about laying-off the meetings instead? From Mini-Microsoft comment thread: "MSFT could have achieved a bigger saving just by changing the default Outlook meeting time to 45 minutes - at least that way people would have 15 minutes in every hour to be productive!"
Sales & Marketing safe in Germany From Mini-Microsoft comment thread: "In Germany, MS released a press statement ... sales & marketing will remain unaffected, but in support a two-digit layoff"
Manager to employee: Shape up or you're next! From Mini-Microsoft comment thread: "Shape up or your next! I am an APEX member in MSIT, joined Microsoft in 2007. I have got a mail from my manager which says that he has saved my ass his time but if I still am on the top of list of employees to be laid off in next 18 months, so better I start working really smart. Can someone suggest me what to do now? Not much experience behind too, this is my first job in the industry and I am really scared!!"
Time for remedial management training From Mini-Microsoft comment thread:
Ballmer, can't you get anything right?
Even brand new managers in my org know this is not the way layoffs should be done. You cut fast, and cut deep. Instead we're announcing "1,400" layoffs today, and are going to string the rest out over the next 18 months? Along with this, we're announcing "no raises" for the rest of you!
Do you know what this is going to do for morale for the next few years? It's going to de-motivate people. I'm not worried about the poor performers in my group who might step it up a notch; we still won't get much out of them anyway. I'm talking about the good performers, the ones that are going to evaluate all of this and adopt the attitude of "meh, why bother?" Why would they bust their ass with prospect of no raises, more budget cuts to compensation/bonuses, and the ever looming specter of being laid off by some HR guy upstairs with a spreadsheet? Frankly, if they're smart, they'll be looking for good jobs outside the company. I know I will be!
Also, what the hell were you doing a few months ago trying to blow $45 billion of our cash reserves on some lame has-been internet company? Thank god Jerry Yang has an even bigger ego than you do and torpedoed the deal.
I had high hopes that if layoffs were coming, at least being Microsoft we'd do them the right way, with class and with a clearly defined plan. I can see that even this is beyond the competence of you and your lieutenants. Ballmer, get your shit together! This is happening on your watch, and it’s obvious that you and your cronies are completely out of touch with the rank-and-file. Management is a skill you just don't have; it's time for some remedial training! Get it together!
Memo to the Windows Business Group From Mini-Microsoft comment thread:
From Bill Vegthe to WBG Full Time Personnel
(Bill is the SVP for the Windows Business)
'The biggest cost-reduction adjustment we are making is to refrain from filling most of our current open head count. Gating our open head count allows us to reduce the net size of our organization while minimizing impact to current employees.
In addition, after careful consideration, we have also decided that some positions in the WBG will be eliminated. Those directly affected by the U.S. job eliminations will be notified by their managers today'
Low-performers have network access till tomorrow. High performers get 60 days. From Mini-Microsoft comment thread:
That's it, they have done it!
The 10%'ers are getting let go this Friday and they have broken the RIF out into 2 buckets:
- The good performers and the poor performers
>> If you are a poor performer, you will not have network access starting Friday!!!
>> If you are a strong performer, you have 60 days to find a new job within the company, after that you are on your own.
Microsoft to hire another 2,000 in search “Even as we take out 5,000 jobs, we will also add a few thousand jobs back into areas like search where we continue to see incredible opportunity to do good work,” Ballmer said during the conference call.
Cuts in Italy "People involved are already aware of the decision. It will cost alot of money this operation here in Italy since the local legislation."
HR system taken offline "The "HeadTrax" is unavailable till tomorrow (Jan 23). (If you didn't know, any FTE can use HeadTrax to track the number of FTEs/Contractors/Vendors in any team in Microsoft)
