Article Categories

More Info

Microsoft Antics: Microsoft Layoffs 2009

Recently, I got a thumping for Microsoft 'bashing'. Honestly, I was surprised. Searching my brain I don' think I have uddered a negative opinion about the direction of Redmond since Vista got its first Service Pak. Since I'm now 'doing the time' for an offense I didn't commit, I'm going to get the pleasure of 'the crime', now.

I have been hanging around MS folks since the move from New Mexico up to Seattle. Therefore, I have a number of friends who are or were MS workers, either under contract or Full Time employees. The first round of layoffs seem to have a particular pattern to them. A pattern that looks rather damning to Microsoft.

Based on the chatter of who did and did not get the axe, I'm wondering how many of the employees we're noted for being in the past, the best of the best on the campus? The early look would suggest that most of the fallen come from that group. It may not make sense at first, however, lets look at this a bit closer.

Most smart companies certainly look to hire and retain the best they can find. Microsoft is no exception. Within the company, the top 5% performers are awarded a Gold Star. It is quite a distinction that comes with it a direct money benefit. It shows up as a bonus, given as stock in the company. The small string to the award is it is given out over a five year period.

The first look at the now unemployed seems to have a heavy weighting to those who have a long period of time with the company (therefore the higher salary range). Further, there seems to be a pattern of folks who have earned good bonuses. As these bonuses are paid out over 5 years, they are debit for the balance sheets for Microsoft.

These bonuses are not payable if you don't work for Microsoft. Wouldn't that be a great way to get debit off the books? Lay them off.

A related question I have is: How many H-1B workers got wiped out? Wikipedia states: "The H-1B is a non-immigrant visa in the United States under the Immigration & Nationality Act, section 101(a)(15)(H). It allows U.S. employers to temporarily employ foreign workers in specialty occupations."

Bill Gates was on the news a year ago stating Microsoft couldn't find enough good talent, so the USA needs to up the limit for the body count available under H-1B.

It appears that the majority of folks handed their walking papers we're on the main campus in Redmond. Estimates of the number of H-1B workers there exceed one in four workers. With 900 people getting the axe, it strikes me as strange that I haven't heard of one of them being an H-1B. It doesn't make sense to me that 0% of 1 in 4 are of such critical nature that they avoided the cutbacks.

It is interesting to me that except for Game Testing taking a 30% across the board cut, the folks who got their walking papers have:
A fair number of years with Microsoft.
More senior in the pay grade range.
Yet, all are under age 55.

It is my understanding if you are 55 or over, if the axe falls on you, you get to keep what would be lost to someone under age 55.

Sure enough, I'm not in Human Resources in Microsoft, and I haven't talked to a cast of thousands over the 72 hours since the first round of cuts. With the limited time that has gone by, the pattern doesn't look good.

And for those of you thinking this makes no sense because as I opened with, smart companies like to retain the best performers. Consider this. When your Microsoft, those rules don't have to apply. Most firms have to really work hard to attract the best. Microsoft does not. Having Microsoft on your resume/CV is getting your talents blessed. It wouldn't cause a great deal of disruption to cast off its current best people, that carry for the NASDAQ listed firm no small amount of debt. From a bean-counters standpoint, it would easy for Microsoft to quickly replace its best with a new crop of best. A new crop that would earn less, while dumping tens (hundreds?) of millions of dollars off the cost side of Microsoft's books.

In the coming days, more facts will settle down. If you think that Microsoft wouldn't do something like that because it has to be somehow illegal, think again.

My memory for the list of things Microsoft did that was illegal, And got caught, is pretty long. Examples go all the way back to Stac Electronics. And if you want to stay solely within the narrow discussion of human resources, Washington State handed them a solid beating not long ago. Redmond was using 'temporary' sub-contractors for years. This avoided all employee benefits. And this was not in agreement with the laws of the state. Now benefit-less contractors get dumped after a year, after Olympia, WA busted Microsoft.

The history of Microsoft says this is going to get interesting.

Looking for a Job? TRCB Recommends this FREE Report

Getting Past The Gate Keeper: How to get the work you love and the money you want by Colin Daymude at The Job Genius.

Download this FREE Report at www.TheJobGenius.com OR
Simply Enter information below to gain immediate access:

First Name *
Email *

Tcat Houser is a trainer in Information Technology as well as assisting people understand the most complex computer all, the human brain. This necessitates his being a professional Road warrior.

As A Certified Technical Trainer and Subject Matter Expert (SME) @ TRCB.com it can be difficult to figure out what Tcat is currently researching.

Help me Please! I am #2 on Twitter in Mexico. Can you help to become #1 on Twitter by following me on Twitter. follow me Twitter

Article Rating (3.5 stars):

Rate this Article:

Article Word Count: 843
|
Total Views: 870
|
permalink

There are (12) Comments

Posted By: Des McDonnell Date: January 26, 2009

That's a very interesting article, there may be some foundation to the claims, as there are other references on the net already:

The question then is whether this accussed behavior is illegal or just immoral.
Personally, I would withhold judgement until all the facts are known. No doub't they will be in due time.
I am sure that the decision to layoff workers was a hard one for all involved. It is a pitty that Windows Vista was rushed to market before it was mature enough to run and sell well. Ultimately that is what caused these layoffs to happen, that combined with the world economic downturn.

I for one hope that Microsoft can get back on track with Windows 7, the beta of which is very good even on limited hardware.
If Microsoft changes its gameplan, and makes Windows 7 what Vista should have been, and listens to its customers - say by allowing at least 2 installs per 1 retail boxed version of Windows 7 per household. They may regain market share and who knows, maybe hire back former employees and in time create new jobs.

Posted By: Deepa Surendran Date: January 26, 2009

I think companies should look at pay cuts rather than complete layoffs. That would be less painful to employees and also give desired savings that organisation is looking for. Ofcourse this option is viable if you think that business is sure to rebound within a reasonable time frame.

Posted By: Jerry Durant Date: January 26, 2009

Companies make strategic decisions based on their view of what is required to remain profitable (and in some cases continue to exist). Whether it's a case of trying to get out from under bonus payments or dodging the H1B situation is probably more a case of small elements that influenced the decision rather than the primal cause. As for the latter situation (H1B), MS has a significant offshore element so having these resources onshore for an extended period of time doesn't make sense economically. Simply the living costs cause any value advantage to be evaporated. For this reason the challenge with MS, as well as others doing offshore ventures, is passionate dedicated PM/Oversight. I see very large companies that regularly move operations to remote locations, even nearshore, then complain about the results. Look at yourself first and see what you are contributing to the chaos. My word for the day is 'Humility' in operations rather than thinking that because you are the biggest that this will overcome all issues. It just makes you a bigger target.

Posted By: Leif Ingvar Buseth Date: January 26, 2009

This is one of Microsofts many problems. They got big penaltys from EU. Vista is a disaster. They are not able to open ODF documents today. etc.

Posted By: Chris Wren Date: January 26, 2009

Posted By: Beatrice Mulzer Date: January 26, 2009

Lets not forget that companies are in business to make money and please shareholder. From this point of view it makes total sense if Microsoft is intentionally eliminating certain "profile" employees. On the other hand, this is just a reminder that regardless of how good you are, you are replacable. So what is the problem with being laid off? When you sign a contract to work for a company, you have the right to leave that company at any time as well - does the comany cry about how unfair it is when someone quits their job and leaves? Where does one come up with the notion that a company treated them unfairly? Or that a company owes them something at all? Nobody is forced to work for Microsoft or any other company - this is a free market, so if you feel that way at all about your job, do yourself a favor and quit. Nothing is guaranteed in live (except that you will die eventually or sooner!) I am very sorry for the folks that lost their job - at any company. It is easy to get comfortable at a certain salary level and expect it to never end. It stinks when reality hits. But if you were one of the top 5% of performers, I know you have the brains to think outside of the box and move on - and best of all, this could have been a blessing in disguise! It's all about attitude. You have just been given a second chance to do something with your life now that the golden handcuffs have been released. I don't think I know of anyone who on their deathbed said "I wish I would have worked harder" nah, go have fun. Life has a way of working itself out, and it will again this time.

Posted By: Chris Wren Date: January 28, 2009

Well when you set your criteria for layoffs you make sure it has maximum benefit to the company.

For grading people, HR teams use a bell curve... so the actual output diffrence between the top 5% and top 10% is very little. They are all good people, just that someone has to be designated as top 5%.

I've been employed by big US corporates and worked in excellet teams where there was no dead wood but when it comes to assessment, the manager has been forced to identify minimum of 2 people to put on a corrective action plan (3 striks and your out), just because that is how HR do their maths.............. go figure
If I was perm, I would rather be laid off than be forced to accept a paycut....... at your 3.5 or 5% pay increase each year, it would take years to recover. There are still jobs out there, just take the redundancy package and go find somthing better.

M$ maybe a big name but they work their staff to hard and only pay on the 65% percentile.

Posted By: Dominic Connor Date: January 28, 2009

The H1B issue is just silly, though with a tinge of racism.

MS has hired a bunch of people, some are dirty non-Americans, apparently...
Now it needs fewer.

To remain a strong business MS needs to retain people on the basis of how useful they are in the future.
I hate to break it to some of the more Creationist Americans here, but merely owning a US passport does not all by itself make you a better programmer.
Nor indeed does software care about the colour of your skill.

Thus the chances of a some guy on a H1B being useful to MS are pretty much the same, regardless of where they were born, or if they aren't white.

As an exercise, try to work out by your own morals (or favourite cartoon series if you are a Creationist) why people should be fired because of where they were born.

Posted By: Renu Venugopal Date: January 28, 2009

My guess would be - this is common practice, sometimes companies do lay-off high-earners, so that the cut is smaller. You see it other industries too, so there is nothing new about it. In fact just because one got a gold star 3 years back doesn't mean that they will be useful for the firm 3 years hence.
As for the h1b issue, it is better not to discuss it as it would technically be illegal to lay off (or consider someone to layoff) based on their passport.

Posted By: Dmitry Matsnev Date: January 30, 2009

As far as the H1B issue goes, Microsoft has never been good at post-H1B retention rate. That is to say, lots of foreigners were joining Microsoft in order to set their foot in the U.S., start the green card procedure via their employer, and then eventually leave Microsoft as soon as they were granted the permanent resident status.

From the Microsoft's point of view, they were getting good programmers for some 5-6 years who do not require extremely high salaries up front, and as soon as they started to emerge into seniors, Microsoft was ready for yet another bulk of foreign-born talent. They are still counting on this scheme, I suppose, but before making some conclusion it would be useful to take a close look at the proportion of H1B/permanent residents/long term permanent residents among the laid-off people.

Posted By: henrylow Date: January 12, 2010

The Center for Media Research has released a study by Vertical Response that shows just where many of these ‘Main Street’ players are going with their online dollars. The big winners: e-mail and social media. With only 3.8% of small business folks NOT planning on using e-mail marketing and with social media carrying the perception of being free (which they so rudely discover it is far from free) this should make some in the banner and search crowd a little wary.

www.onlineuniversalwork.com

Posted By: henrylow Date: January 13, 2010