The on-again/off-again rumors of massive layoffs at Microsoft appear to be off again. Well… sorta.
CNBC, citing Microsoft sources, said that cuts will be made through attrition and within the ranks of contract employees and not from full-time staff.
I’ve known a lot of folks who’ve worked at Microsoft over the years, and a helluva lot of them have worked as contract employees. So while Microsoft may not be planning to “lay off” 17-percent of its workforce, as had been recently speculated, a large cut in contract employees could still have a significant impact on our regional economy.
They ought to talk with Governor Gregoire about lay-offs & cuts.
Did you know in Washington State Government that creating a new position and then not filling it is actually a CUT!
And that early-retirements fall in the Lay-off or CUT category??
Microsoft needs to thin the herd.
Their stock prices have plummetted.
Take a look at this chart from 1/1/2000 to present:
http://finance.yahoo.com/echar.....=undefined
No dividends, plummetting prices.
PS–
The stock was up to $21 today with news of the “deadwood” reduction.
Microsoft should have done this years ago.
Contract employees are lucky they’ve stuck this long while shareholders have been screwed.
I do not own Microsoft and have not owned it since 1999.
re 1: Your obsessive analyzation of the stock market is about as useful as the guy who knows all of Phil Rizzuto’s baseball statistics.
The stock market is information that is useful to people who have money to invest in a glorified Ponzi scheme. For everyone else, it’s about as meaningful as a racetrack tout’s prognostications.
headlice–
You are a real bonehead.
Lots of people held on to Microsoft stock because it was held in such high esteem….even though the price dropped over 60% over the past 9 years and they pay no dividend.
It’s about time folks start questioning WHY??
And the WHY is they have been supporting lots & lots of Contract Employees at the detriment of shareholders.
PS–
C’mon, you must have some money to invest.
Working for the School District, don’t you have a 403(b)???
If not, you certainly should….unless you are an idiot.
Ohhhhhhhhh, that’s right, you are an idiot.
One that needs nanny state to survive.
headlice lucy@2 farted:
You must be a Bernie Madoff investor.
Yes, the gift that still gives us paws…
Bernie Madoff – brought to HA by Puddy before the MSM woke up and smelled his mess.
Puddy–
headlice is a useless School District employee who lives his life in jealousy and envy of others who have the guts to invest capital and create jobs.
He is a PosterBoy for ineptness….something the State of Washington Government Bureaucracy breeds…like headlice!
That third person shit of yours is really weird, Pudz. Evidently, you inhabit a very strange space. You do know that, don’t you?
Hey Goldy, do you have the sack to ask Sherril Huff about the DETAILS related to the IRS Tax Lien that she failed to disclose??
I’m just askin’!
Whatever….it’s still a profitable enterprise…stock prices are just legalized gamblng.
Only in your mind Steve…
And BTW, what Microsoft needs to do to raise its stock price is buy back some of that horribly diluted stock–not lay off useful workers creating products.
@10
You mean like this? Microsoft announces $40 billion stock buyback
—
As for layoffs at MS – aren’t they in the process of rushing out their new OS, Windows7? If they are, then they will be hiring masses of people very, very soon. If not, they will be out of business very, very soon.
Daddy Love–
They have bought back stock in the past.
Face it, their 9 year chart is HORRIBLE!
So are their future profit forecasts.
The stock price reflects anticipated future earnings. Unacceptable.
Why is it somehow wrong for Big Corporations like Microsoft to look hard at it’s cost structure and cutback?
You are ASSUMING they will be laying off USEFUL workers. Useful be who’s definition?
What is your definition of USEFUL??
Trust me, Microsoft or any company would not lay-off highly profitable workers in profitable product lines.
Why would they???
Once again, the moaning of corporations bad/all workers are useful Krowd.
Gag me with a fork!
Cynical said:
Uh, it’s no secret. The stock was overpriced during the dot.com boom. Too much speculation by people trying to get rich quick. Like lots of high-tech stock, it has never regained that excessive value.
And, of course, Gates and Allen and lots of other “Microsofties” have been gradually selling off their stock (diversifying their investments), which is a prudent move, especially if you are no longer in control of the company’s fortunes. I don’t know absolute numbers, but I would expect that such sell-offs would have some negative affect on stock prices over the long run, if the stocks aren’t being pushed up anyway by other factors.
But, of course, there are always people (some stockholders, analysts, general critics) who insist loudly that the company make massive cuts in order to push the stock back up to that unrealistic value, so those stockholders who want to cash out soon can do so without taking a loss and still be rewarded for their imprudent investment. Of course, such moves may not be a prudent long-term strategy, especially if you rely primarily upon a mature product (such as Windows) and need to be positioning yourself for the next tech cycle.
Sound Transit is going to be responsible for 40,000 new jobs in this region this year, mostly in Seattle. Those are good-paying, family wage jobs. Any slight employment drop at MSFT will be more than offset by ST’s contractors’ hiring binges in the coming months. Our local economy will get a good, swift kick in the ass from ST!
Back to the topic of layoffs….
During the 1980’s, lots of people touted the “lifetime employement” promise of Japanese companies, comparing it favorably with U.S. practices. But that was a very incomplete picture of the Japanese business system.
In the first place, such “lifetime employment” only went to “permanant hires” at the largest companies. Many smaller companies had no such promise.
Secondly, even within the larger companies, there were/are several classes of employees. The “permanant employees” pretty much had guaranteed employment, as long as they didn’t screw up too badly. But below them were “contract employees” who worked for the companies, had the same benefits and were paid through the same human resources department, but were not guaranteed permanant employment and would never get promoted above a “permanant employee”. At the lowest level were the “temporary workers”, often young women, who did the same work as the youngest workers of all types, but were expected to quit as soon as they got married (or at least, when they became pregnant).
Whether you were a “permanant hire” or a “contract worker” often had more to do with the hiring quotas in effect when you were hired. If the company’s budget said they needed to hire four permanant workers and six contract workers, then it might hire the first suitable persons through the door as permanant employees, and the next six would be hired as contract workers, regardless of the individual merits of each applicant.
We ran into this in our own company, where your position in the company was dictated simply by whether the person you were replacing was a permanant hire or a contract person. This led to promotions in one department (consisting of six persons). The permanant hire was the least competent, and generally everyone agreed it would be a disaster to promote her to management level. But this meant that the five “contract employees” couldn’t be promoted either. The logjam was evenatually resolved when, after several years of effort, the U.S. branch of the company took the unusual step of converting all the contract employees in that department to “permanant employees”.
So when times were bad, the Japanese company will first cut back on hiring the temporary workers. Then it would decline to renew the annual contracts of the contract workers as they came up for renewal. Thus a company could, over the course of a little over a year, reduce it’s total workforce by almost 2/3, without ever having to announce it’s made any layoffs, and it can certainly deny having ever laid off a “permanant employee”.
The shame of laying off a “permanant employee” is to be avoided at all costs in Japan. The largest companies have agressive recruiting campaigns for the graduates of the top universities in Japan. If a large company were to lay off any of it’s permanant employees, they could find such recruiting efforts scuttled by the competition, who would remind the recruits that such-and-such company didn’t honor it’s promise to it’s employees, would probably do so again, and it just goes to show how shaky the whole company is – it might go under at any time. The salesmen of the competiting will remind potential customers of it in every sales call, arguing that it’s warranties might be worthless soon since such a company was bound to go under very shortly.
And BTW, what Microsoft needs to do to raise its stock price is buy back some of that horribly diluted stock–not lay off useful workers creating products.
————–
Huh? You mean products like Vista, that are ALWAYS playing catch up and always require more memory and more processor – so more money from consumers – just to run them? Or perhaps Office, that over-priced glob that never stops growing year after year? And what about all those monthly security patches, including the one for the HUGE IE security hole just a few weeks back that the bad guys wasted no time in exploiting?
There are reasons why Microsoft’s stock has has done nothing for a decade – meaning it’s actually lost investors money – and buying back the stock is not going to do a thing to address these.
16 D
The short answer is nope. Windows and Office are cash cows that help MS consolidate its hold on the PC market. While they are interesting to watch, people do not buy them because they need new OS or office product features.
As for monthly security patches, gee, perhaps you should buy from a company that doesn’t patch its security holes as they are discovered? You’d like that better, right? What’s the matter, did you lose your porn in a DOS attack?
But markets are changing. Microsoft has a number of R&D-heavy emerging technologies, which take lots of man-hours to bring to market. That’s just the way it is.
And you are right, buying back stock will not address your concerns–but then, your concerns were never what I was talking about. It will address the concern in reference to which I mentioned it: over-dilution of the stock. I’ll help you out here. That means there are way too many shares outstanding.
“While they are interesting to watch, people do not buy them because they need new OS or office product features.”
Microsoft hit upon a great way or getting people to keep buying upgrades, years ago. It would offer the upgraded version to new computer manufactures at deeply discounted prices to be bundled with their hardware. Then it would make it difficult for anybody else to open files created by those new versions without buying the upgrade itself – at full price. So even if Office ’98 had all the features you wanted, you eventually had to upgrade to the newest version whether you wanted to or not, just to be able to open the spreadsheet somebody else was sending to you.
Daddy Love postulated:
.
I immediately thought of HA’s resident pervert Steve. My first laugh in a long time from an HA libbie.
Thanks Daddy Love.
14. Sean spews:
The problem Sean is that WE have to pay back the huge debt. Nothing’s free.
The question will be is ST economically viable and do they have a reasonable business model…or is it, Build and PRAY that user come?
Methinks it’s a lot of the latter.
Geez, Pudz, talk about Pavlovian. I know! We’ll show the new guy how it works.
http://www.republicanoffenders.com/Pedophiles.html
And now, in a manner that Pavlov would truly appreciate, Pudz will accuse me and anybody but a Republican of being a perv. Like Pavlov’s dog and the ringing bell, it works every time. So revealing. One can only conclude that Pudz fucks goats. Oh, and then there was the time Pudz was going on and on about goats in blackface and skirts! Lordy, I tell ya, the guy’s got some real issues.
“Methinks”.
I seriously doubt that.
@22 You got that right.
Say, I’ve been meaning to ask, are you out of IBEW Local 46?
“The problem Sean is that WE have to pay back the huge debt.”
No we don’t. The people living here in the 2020-2040 decades will be paying it back. Big difference: I’ll be long gone by then.
As for monthly security patches, gee, perhaps you should buy from a company that doesn’t patch its security holes as they are discovered? You’d like that better, right? What’s the matter, did you lose your porn in a DOS attack?
——-
Actually, perhaps the company should institute better programming practices so customers aren’t exposed to these holes in the first place. Stuff like this:
http://voices.washingtonpost.c.....r_cri.html
where millions of users are exposed to having critical data hacked should not be happening. These products may be a cash cow for Microsoft, but the cost of these breaches to customers, retail and business, in terms of time lost and data theft is immense. Perhaps a better use of the company’s hoard would be to compensate people for these losses.
Regarding MSFT’s RD results, there have been an awful lot of poor starts thus far. Other companies have been far more innovative.
This lack of confidence is reflected in the stock.
It looks like if you’re a high school dropout and screw Sarah Palin’s daughter and give her a child, you can not only get $300K for baby photos, you can get yourself into an electrical apprenticeship program even though federal law requires that you have a high school degree to do so. Back in the day, you also had to have passed both high school algebra and geometry. I reckon that’s probably asking a little too much of a meth-addled Wassillabilly.
http://www.adn.com/opinion/story/641263.html
I’m sure Pudz will pop up now to whine about FDR, commie-fascists or even, believe it or not, goats. It’s funny how it works. We ring a bell and our Pavlovian Puddzy salivates on his keyboard every time.
I haven’t seen MS as much of a “growth company” for nearly a decade. I lost interest in their stock about 1998 or so. Sure, MS still went up another year or so, but at the time there was a lot more money to be made trading tech stocks like JDSU, ETEK and SDL. That was about the time I had concluded a series of construction projects with MS – Redwest, Pebble Beach, Augusta, Troon, Pinehurst, Buildings 27 and 28, and a data center on Canyon. They wanted me in their facilities department but I saw no future with the stock options that had done so well for their earlier empoyees. For that and other reasons, I declined. That’s one I got right.
Um, does no one notice that Microsoft issues a quarterly dividend of $0.12/share, and that they’ve increased their dividend over the last several years?
they don’t lay off …… ha ha ha!
they just re-org and … a bunch of people are unemployed!
of course, since it is a meritocracy uninfluenced by group think and cliques, those who are laid off are the un-meritorious!
rmm.
Back to Mr. Cynical’s original comment about share price and all… you should use the same yahoo tool and run a comparison between Microsoft, Google, and the Dow Jones Industrial Average for the past few years. With minor variations, the charts look pretty similar.
When it comes down to it, I don’t think Microsoft is doing anything horribly wrong here… their stock price fluctuations look pretty similar to the index. I’m unconvinced that “thinning the herd” will really do any good over the long run. There are other courses of action the company could probably take to increase their growth potential, but is boosting your stock for one quarter, at the expense of your own growth, really worthwhile?