Microsoft Laying Off 18,000 Employees

I completely agree.

I also like that your comment is like a matryoshka doll of analogies.

"Premature" depends on our own personal experiences; you seem fed up with the Kinect that you probably would've preferred it never come out. As for the phones, sure, whatever, maybe. I'm not a phone guy; I wouldn't know their history with that.

What I'm referring to is the A-to-B narrative. Regardless of prior phone deployments, the Kin thing was surprising because of how much build-up occurred. If they'd slipped them out quietly, then cancelled them, no one would have batted an eye. From what I remember, they were positioning it as the successor to the Sidekick, at least spiritually. For something that ate up so many resources and, more importantly from the consumer perspective, marketing, it's incredibly weird to see them dump it. For anyone who decided to buy a Kin would've been even more shocked to see the support pulled from under them 3 months down the line.

The Kinect is a controversial piece of tech. People hate it, people...are ambivalent towards it. The point is, Microsoft must've been working on Kinect integration into the XBONE since the first iteration came out in 2010(?). The saw that as the future. When they cancelled the Always On features, that was also controversial - people hated on it but once they did, a lot of fans came out of the woodwork. However, that was a software rework. Probably a huge clusterfuck, but all easily done within the box and on their cloud servers. The Kinect thing is bewildering because not only do they kill their vision of the Minority Report future they were probably imagining, but also undermines any future games that would use it. I'm sure Harmonix was pissed to hear this happen. Their market cap is instantly limited by current hardware sales plus the trickle of people buying separate Kinects.

I understand there's a time and place in business to cut the umbilical, to cut your losses and trash an initiative because it's a misguided idea. But you do that before you ship it. When EA cancelled Elite (twice) on the eve of the releases, that was hilarious and probably disastrous for EA. Microsoft has blown that record out of the water by months.

Just as nobody forces people to leave pithy comments about others' misfortune.

There's my primary issue with Microsoft. For all the yang they're talking about reforming and reshuffling the company, listening to the people at the top (the people least likely to be getting reformed or reshuffled), one thing seems agonizingly obvious to me:

Microsoft still don't know what consumers want. The reason Windows 8 became a reality was because businessmen talked with other businessmen, got themselves all riled up about inter-brand synergies and "digital work/life experiences", and had their head so far up Microsoft's spacious corporate ass that they couldn't see the forest for the trees.

Hell, they didn't even know they were looking at trees.

They didn't even bring woodworking equipment.

The only thing they brought was a big sticker that said "mobile-first, cloud-first, also touch", slapped that fucker on a stump, shouted in unison "STRATEGIC ALIGNMENT" before giving themselves well-deserved slaps to the crotch, taking off all their clothes and running buck-wild into the marketplace with a new "clarity of vision".

Microsoft certainly needed to fire 18000 people (as crappy as it sounds). But what they needed more was to hire fresh management that hadn't been incubated inside of Microsoft. They need to hire outsiders, creatives, critics and destroyers.

Words like that from Nadella (and even worse Stephen Elop, former head of Nokia and current head of Devices) inspire nothing but doubt in me for the future of the company.

Business speak will be the death of Microsoft. Too busy counting the fingers on their hands to notice the axe above their shoulder.

and then Sony is making Powers, the show we've all wanted for so long. The best comic book about super heroes ever. Brian motherfucking Bendis.

Ken Levine's favorite fucking comic. Hell yeah!

Microsoft shuts down their "original tv content" whatever.....when they were all about that stupid stuff at the beginning.....and Sony is making something that is just as huge and important as The Last Guardian continuing to exist.

Damn Sony is awesome. Now Powers better not stay in development limbo forever now...that show's gonna knock everyone on their ass if it's done right.

Everyone read the Powers comic book if you don't know what I'm talking about or listen to the Irrational Podcast episode where Ken Levine interviews Brian Michael Bendis.

You'll be inspired to check it out, after you hear how much of a little kid Ken Levine still is about this stuff.

Yeah I'm one of those atheist, pro-gay, pro-abortion, sex-positive, egalitarian, liberal folks who swallow tons of rhetoric from the far right. Because business finance comes down to your politics and not, you know, the economic realities of business finance. The fact that you begin your appraisal of this situation by assuming business finances are all a matter of political persuasion tells me that this is culture war issue for you and has nothing to do with business.

Firstly, MS could have cut just a few of the executives making bad decisions that account for laying off 18,000 people who have little to do with company strategy. But they didn't.

You have no idea who is getting cut or what their actual jobs are. I bet you most of the executives associated with the divisions of the company that are being eliminated or shrunk will also be let go, because there's no need for upper management when there's nothing to manage. Those decisions are not political, they're mechanical. Once again, too many young people believe this 'job provider' nonsense and don't realize that when companies offer jobs, it's to fill a need. It's not because they're doing the world a favor by sharing their money with a new person.

I do like that your plan is to fire executives and continue running the branches of the division that are not profitable. Man, can't wait until you get some money of your own to burn.

Since the other person isn't responding, maybe you can; if the 18,000 employees who are being let go bring a net profit to the company greater than what their salaries, benefits and insurance costs.... why would they let them go? If the people being let go are the hard-working people you say they are, and the executives who were not let go are the incompetent stooges you say they are (because this is just a storyline for you), then how will Microsoft stay profitable?

Your arguement assumes American Capitalism is a meritocracy, where people are paid what they're worth, and hard work is rewarded. In reality, the 1% is more often than not born into wealth, given positions that are not earned because of family name, or network...and kept in place due to being in that club rather than earning anything for themselves. Look at Donald Trump, Paris Hilton, George W Bush, and the list goes on.

Excellent sermon, but did you want to talk about Microsoft? You know, the company founded by a middle class dropout?

Man, it must be really nice for most people to work hard, gain skills and acquire better positions throughout their life just for kind fellows such as you to blanket absolutely every one of them as being a part of the 1%, that class of people who are inherently wicked and deserving of scorn due to the circumstances of their birth. I'm an accountant, where do I fit in? Do you have to be in a management position to be ethically reprehensible for existing?

See, what you describe as living under illusions I would describe as not being totally full of shit.

No wonder Xbox 360 is already dead , while the ps3 is as alive as ever ! , i made the wrong choice getting that piece of garbage =/

@wuddel: I don't think this news (the layoffs) pertains to the xbox division.

Well all I can say to this is that I am in a mall in Switzerland right now and the biggest electronics reseller has taken the xbox one off shelves. Its all Ps4 an Wii.

@noodleunit: Do they already know it ain't working? How about they never actually wanted it to work out?
To me it looks like this has been planed for quite a while, Stephen Elop had been Microsofts trojan horse to get into Nokia, so to speak.

He grabbed a big fat signing bonus of $6 million, in addition to his $1,4 million annual salary, quality people demand quality payment, right? Then he proceeded to do his "quality job", which ended up looking like this:

During Elop's tenure, Nokia annual revenues fell 40% from 41.7 Billion Euros per year to 25.3 Billion Euros per year. Nokia profits fell 92% from 2.4 Billion Euros per year to 188 Million Euros per year. Nokia handset sales fell 40% from 456 million units per year to 274 million units per year. Nokia share price which was at 7.12 Euros on the day Elop was hired, had fallen to 81% to a bottom level of 1.44 Euros two years later, after which it began trading at 4.14 Euros, up 36% on the day. Elop's success in negotiating the sale of Nokia's struggling mobile device business to Microsoft has been described by many securities analysts as a significant victory for NOK shareholders, particularly when viewed in context of failed efforts by Blackberry or HP to secure value for handset business owned by those companies.

I don't understand how any of this can be considered a "significant victory for NOK shareholders", to me it looks more like an "significant victory for Microsoft vultures". And tbh i'm getting sick and tired of "managers" receiving millions upon millions in bonuses and salary, yet never being held accountable for their failings.

Instead they are firing the grunts, the people that actually do all the heavy lifting, the people that actually have to depend on the job for survival, because these people don't have millions upon millions stacked away from their previous "ventures". These people are actually dependent on that job, while most "Multimillion $ MBA's" only show up to throw a couple of more millions on top of their already obscene amount of wealth.

@brodehouse: I think you are living under multiple illusions and you probably swallow a lot of rhetoric from a far right political faction without looking at facts...

Firstly, MS could have cut just a few of the executives making bad decisions that account for laying off 18,000 people who have little to do with company strategy. But they didn't. I'm sure they have about 50-60 middle to upper middle mgmt that have salary+bonus equal to or greater than these 18k.

The problem is, once you reach a certain level, there is no accountability for anything. If you screw up and run a company into the ground (which is hardly MS situation) you can blame it on "redundancy" and "synthesize" 18,000 human beings.

Your arguement assumes American Capitalism is a meritocracy, where people are paid what they're worth, and hard work is rewarded. In reality, the 1% is more often than not born into wealth, given positions that are not earned because of family name, or network...and kept in place due to being in that club rather than earning anything for themselves. Look at Donald Trump, Paris Hilton, George W Bush, and the list goes on.

@ch3burashka said:

Google does a lot of the same thing. But to be completely honest, I think they've taken the kinect thing way too far. They didn't pull that plug prematurely. And the phone thing? They've been trying to make cool smart phones since BEFORE the iphone came out.

@mrburger:

@mrburger said:

That letter really synergizes the focus of their corporate journey's viability transition for me.

Yeah, but unfortunately, it doesn't adequately leverage broad observational cognitive assets to normalize the framework of optimal cultural imperatives and other concerns likely held by our valued associates in regards to establishing a verticality oriented contextualization of utilizing a more progressive temporal model. Dude talks funny too.

At least they're able to admit when something isn't working. I'm actually impressed with how fast they're acting for such a massive company.

As someone affected by the first round of lay-offs back in April, Microsoft Studios has a real problem with being staffed by a bunch of scared-for-their-job but somehow still non-contributing 40-50 something breeders with very little imagination. Don't get me wrong, there is a fair amount of brilliant people that work there, but every round of layoffs I've seen over 4 years of working there results in the youngest (often times brightest) lower level staff losing their jobs..... not the high level policy makers who ramrod shitty big-budget strategies.

My 2 cents.

That letter does nothing to do to even try to soften the blow to those poor people getting laid off. Throwing around words like "culture" and spouting a bunch of shit about the journey of the companies future while seemingly not acknowledging people hard work and time or reassuring them that they will try to make the transition as easy as possible is so corporate and faceless.

But hey, that's giant corporations for you.

So, whoever wrote this is part cyborg and part shark. Seriously, if it was revealed that Satya was a soulless killing machine that wore children's heads as hats, I would not be shocked.

Dear lord...I couldn't even get my eyes to focus. Sorry you were effected by this.

I'm one of these unfortunate people who came over from Nokia just to be booted out. Check out the goodbye memo reading challenge we had to deal with from Elop. Summarised brilliantly here ..
http://nymag.com/daily/intelligencer/2014/07/microsoft-lays-off-thousands-with-bad-memo.html

@inkwolf: Yeah, I thought the same thing.

The same song came to my mind as well. The corporate-speak in the announcement is absolutely sickening. The phrase "I synthesized our strategic direction" in the first sentence almost made me throw up.

I'd like to say thank you to the people hitting the Reply button and not the Quote button.

Doesn't? Can't? So what have they been doing for these past years?

According to Florida Congressman Alan Grayson, in many states, Wal-Mart employees are the largest group of Medicaid recipients. They are also the single biggest group of food stamp recipients. Wal-mart’s "associates" are paid so little, according to Grayson, that they receive $1,000 on average in public assistance. These amount to massive taxpayer subsidies for private companies.

Not that it matters, won't be long before even these kinds of jobs also will have been "rationalized away" and replaced with customer self-service or some tech solution. The 1% are not job destroyers per se, because they are actually productivity destroyers, on the job front they are actually inventing new jobs, mostly bullshit jobs ;)

I also don't get how this is any real news? Microsoft has been playing Nokia's vulture for quite a while already, or have people already forgotten about the whole Stephen Elop controversy?

"Realign" used in just about any corporate speak is never good. Hope those affected can find work right away, if not soon after.

Were they? What evidence of this do you have? Generally, companies that sell themselves to other companies are not doing extremely well on their own. I certainly have not heard good things about Nokia products for several years. In your mind, what do you do to remedy a sinking ship? You seem to believe that even if the company is losing money, the company is profiting and thus should not fire employees.

The ones responsible for destroying their worth won't be fired

Well now you're showing you have a misunderstanding of how the job market works. Your 'worth' is equal to what you can do for others. It is not what job you have or had. In some markets, some services are more or less valuable than others. Everyone fired from Nokia continues to have the same skills and abilities they did the day they were fired. Either their skills are valuable and their 'worth' has not changed whatsoever, or their skills are not valuable and thus their dismissal is entirely credible.

It is because they were mismanaged, individual employees are not generating profit.

You have no evidence or argument put forward on how or why this specific company was mismanaged, you are just stating that it happened and we should all believe you for no reason.

You realize managers are also employees, right? And they're often among the fired as well.

And no, even if an employee is not earning the company more then they cost at the moment, they should not be fired in such quantities. Especially if no one at all will notice the cost that that employee generates at the end of the year.

...

18 thousand people making between $25,000 and $100,000 a year. That's somewhere between 450 million and 1.8 billion dollars. These numbers actually double when you factor in benefits and insurance.

You know, I think companies do notice the cost of salaries paid. I think they'd notice whether or not they paid a billion dollars in salaries or not. I think they'd probably have a lot of very intelligent people looking at the output of these 18,000 employees and deciding whether or not their output and market conditions were such that their employment makes good sense. If there was profit to be made by continuing to employ them; why on earth would they have fired them?

What do I know, I'm just an accountant.

Economic decisions like this are made because they profit the ones making the decisions, no one needs to take a course to see that. This has nothing to to with self-entitlement. The people getting fired were most likely good at their jobs since Nokia did very well before MS started actively destroying that company. So they get fired because other people screwed them over. I think it's only fair the people doing the screwing get punished.

Once again. If the people who 'were good at their jobs' were bringing a net positive to the company, or the division in which they worked was bringing a net positive to the company, how would it profit Microsoft to not have them bringing a net positive?

Income inequality is the reason this has happened. It will cause the rich to get richer. That's why it relates to the initial point.

Actually, generally the rich get richer by giving someone 10 dollars in wages for 25 dollars in productivity. That's how the rich get richer. The rich do not get richer by paying nothing to receive nothing. Nothing actually changes in that scenario. Those scenarios are what we call depressions.

You have this very... storybook idea of how business works. The profits just appear to come in naturally, and everyone invests without expecting anything in return, and profits appear to be tied to how few employees you keep hired rather than their ability to provide services to meet a market demand. Employees who get hired deserve their jobs independent of whether or not they're valuable.

You should really watch Other People's Money. I feel like you'll really like Gregory Peck's character.

No less than 6 robots wrote that email.

God, that email from the CEO started with no less than 5 bad buzzwords. Eesh.

Xbox Entertainment Studios, tasked with developing original content for Xbox Live, has been shut down before it even really got off the ground. TheHalo-related projects, Halo: Nightfall and a planned TV series, are expected to continue.

One of the few things tempting me to get an Xbox One...now it's gone. I guess I still want it for Scalebound but I doubt that's a permanent exclusive unless it sells poorly which it probably will because I doubt many Xbox One owners are familiar with Hideki Kamiya, the director of Devil May Cry, Resident Evil 2, Viewtiful Joe, Okami, Bayonetta, and The Wonderful 101.

@nofzac: Probably nothing? When the company gets on track and back to where they used to be, then yeah, he'll probably get a bonus. They aren't cutting back because they have money to throw around in bonuses.

Dude, seriously you have a severe lack of knowledge on this. You think the Xbox led to these layoffs? The overwhelming majority of them are overlapping jobs from the Nokia purchase. A company does not need to have that many employees doing the same thing, it's a waste of money and efficiency.

GFWL left a sour taste in peoples mouths and every time a steam competitor comes out, people scoff and get upset. There's a lot of clients on PC already, asking companies and consumers to adapt and adopt to another one is pointless when they have the Windows Store. We don't know what they have planned, buy cross buy on a small scale is already implemented and can only grow.

If you really think they're oblivious and not listening to their user base and the market, you are astronomically incorrect.

Fourth biggest layoff in US tech history...

You have your head on straight. Don't listen to him.

You said the 1% are job destroyers which is an absurd assertion. A Walmart boss doesn't and can't force anybody to work for minimal wages.

Well, it's nice to know America doesn't have a monopoly on stupidity.

I'm not claiming they didn't need to be bought, I'm saying that Microsoft shouldn't have bought them if they were going to fire half of the workforce! What evidence do you have that Microsoft was the only one capable of buying Nokia?

All I'm saying is that Microsoft just took shook up the lives of 18,000 people and their families and I can't feel more sympathy for them. That's too many people to kick out to the curb because of a vision. I think it's terrible.

Everyone in this world owes everyone else a minimum of respect. Humans are social animals. We realize we can't live on this world alone. Some of us seem to forget that and think that others only exist to serve them. And yes I do realize that can also mean that employees might think that companies only exist to give them money. I'm not defending those people, but the people who actually do a good job and still get screwed over.

But people who are actively destroying other people's lives to better themselves are criminals, even if they are not so in the eyes of the law. I don't see any difference between someone who burgles someone's house and someone who fires thousands of people to get a bigger bonus, except for the scale.

So: Walmart boss forces his employees to work for minimal wages which makes him earn more in an hour then an average employee does in a year. He then uses a small amount of his (ill-gotten) wealth to buy a boat, jewelry, suits,.... which indeed generates a few more jobs. If instead he would pay his employees a fair wage, he would STILL be rich enough to easily afford all the same luxuries. But then his employees would not have to scrape by and they would be able to spend more money on a nice car, a better house, healthcare,... creating much more jobs in the progress then 1 guy buying yet another Rolex. I figured trickle down economics got buried alongside Reagan, but I guess both of those monstrosities will be around much longer than they deserve.

I'm not american, so my education wasn't sponsored by businesses & lobbies. That's probably why I don't accept the fables the 1% tell the rest of humanity.

No person or company in this world owes anyone else a damned thing.

Now, you may live by a moral, religious or ethical code that dictates how you should deal with your fellow humans, which I do, and that's a different story but just by being born and existing on this earth does not entitle you to anything or obligate anybody to do anything for you.

Well, all of those Nokia employees were pretty valuable before MS got their hands on the company. The ones responsible for destroying their worth won't be fired, and will most likely be rewarded (Elop is the perfect example there). It is because they were mismanaged, individual employees are not generating profit. And no, even if an employee is not earning the company more then they cost at the moment, they should not be fired in such quantities. Especially if no one at all will notice the cost that that employee generates at the end of the year. It even makes sense to keep them on because MS will still be wanting to grow, and will need to hire more employees soon anyway. Why not invest in current employees and educate them on new technology that MS thinks will be needed in the future?

Economic decisions like this are made because they profit the ones making the decisions, no one needs to take a course to see that. This has nothing to to with self-entitlement. The people getting fired were most likely good at their jobs since Nokia did very well before MS started actively destroying that company. So they get fired because other people screwed them over. I think it's only fair the people doing the screwing get punished.

I think a 'reasonable' division of company profits is one that makes sure that everyone involved in those profits can lead a comfortable life, not just the very top employees and the investors. The profits in that country of 320 million people could easily make sure no one has to starve, sleep on the streets or lack healthcare. And the top of the pyramid would not even notice it.

Income inequality is the reason this has happened. It will cause the rich to get richer. That's why it relates to the initial point.

Right, because when the 1% start a business no jobs are created. When they buy a house or a second or a third house nobody is employed to build it, it just magically appeared. Also nobody was paid to build their cars or boats or expensive suits or watches and jewelry or all the extravagant things they might buy. News flash. Millions of people around the world earn a living providing goods or working for the 1%. That you don't get this and that you've probably been brainwashed in our education system to see something wrong with this is mindblowing!

@spraynardtatum: although it doesn't negate the shittiness of those people losing their jobs it's still true

Quick update: MS cut 13,000 of the 18,000 yesterday. The bulk was from Nokia (about 12,500) and the other were from 'middle managers' across the globe. The rest will be in the next months.

Harsh doesn't even begin to describe it. According to a buddy of mine at the main campus moral is gone. No one gives a crap about anything right now and no work is getting done.

I'm confident that in the number of people laid off worldwide on a monthly basis, 18k isn't even a fraction of a percentage. It just seems big, but MS is one of the largest corporations in the world. The worldwide phone market is growing, not shrinking. Those Nokia employees may find jobs with LG, Samsung, HTC, Apple, Google, etc, because those growing companies will want them.

Yeah, it's not great for those people, obviously. But "inhumane" is just silly.

This article was just published yesterday quoting Finland's Finance Minister Antti Rinne.

In short, he said Microsoft betrayed Finland. Note that translation will be needed (unless you speak Finnish).

It seems Microsoft are still the leader in bad publicity.

Also, stop acting like MS is doing this because they might run out of money otherwise or all those people are not doing anything anyway right now. This is not a company firing people to stay competitive or profitable. This is indiscriminately firing people to increase already skyhigh profits.

You don't appear to understand how business works. If the employee is valuable (ie; their employment creates more money than it costs), then how exactly would firing this source of profit increase profits? If the employee is not valuable, their employment costs more money than they create in revenue, the way it 'increases profits' is by 'decreasing losses'. But, if a company has some employees who are valuable and earning that company profit, you feel as if that company is obligated to continuing the employment of workers who are not valuable. And this is apparently good for the employees. You ought to do some reading on expectancy theory.

For serious, take an economics course. You know why income inequality has been able to get the way it is? Because the average person is so fucking clueless when it comes to the motivations behind economic decisions. Hence why ignorant middle managers think the only way to get more profits is to whip people harder. Hence why ignorant entry level employees think they have an entitlement to their positions or income independent of what they do for others. What you do for others is all other people view you as.

I would like to live in a world were companies have to fairly pay/treat their employees and investors get a reasonable profit. Not this world were employees will be paid the absolute minimum possible and investors that are already incredibly rich get all of the profit.

What is your definition of 'reasonable' and what metrics and experience have you used to decide what 'reasonable' is in a country of 320 million people?

Thinking our current system of 1% of people having all the wealth while being absolutely useless to society is okay, is mindblowing to me.

You are bouncing off of different concepts and ideas and it's crazy. First it was that companies have an obligation to provide an income to people they hired for eternity (with no understanding of why people get hired for jobs). Now it's that income inequality is too great (and it is), with no real care for the initial point.

The first 13,000 layoffs will be determined in the next six months. That seems like an unusually cruel amount of time to wonder if your job is going to be around the next day, but so it goes at big companies.

Having gone through this type of a process at a big company myself in the last two years... 6 months is nothing. Its the ones left afterwards wondering how much longer it will be until they have HR meetings dropped on them - mine came up nearly 10 months later.

I think most rich people are job destroyers. Because doing more with less(-paid) people always benefits them. Also, stop acting like MS is doing this because they might run out of money otherwise or all those people are not doing anything anyway right now. This is not a company firing people to stay competitive or profitable. This is indiscriminately firing people to increase already skyhigh profits.

I would like to live in a world were companies have to fairly pay/treat their employees and investors get a reasonable profit. Not this world were employees will be paid the absolute minimum possible and investors that are already incredibly rich get all of the profit.

Not worshiping the dollar does not equal promoting communism. Thinking our current system of 1% of people having all the wealth while being absolutely useless to society is okay, is mindblowing to me.