Zuning it: Microsoft reportedly plans to lay off hundreds of employees

[*LTD*]

http://www.neowin.net/news/microsoft-reportedly-plans-to-lay-off-hundreds-of-employees

http://www.bloomberg.com/news/2012-...organization-of-marketing-job-reductions.html

Microsoft reportedly plans to lay off hundreds of employees

Microsoft may be looking to make some changes in its marketing division which unfortunately may include layoffs for hundreds of its employees. Bloomberg reports, via unnamed sources, that the final plans have not yet been set in stone and may still change. The first actions as a result of these plans could happen in the next 30 days, according to the report.

Microsoft is reportedly making these changes to its marketing division to eliminate some job overlap and also to better respond to its competitors such as Apple. The report claims that Microsoft CEO Steve Ballmer doesn't feel that the company is currently getting the best return for the money it spends on marketing. In the company's last fiscal year Microsoft spent $13.9 billion on sales and marketing.

If Microsoft does end up laying off workers as a result of the marketing division restructuring, it would only be the second time in the company's history that Microsoft said good bye to a large number of its team members at once. In 2009, at the height of the economic crisis, Microsoft laid off a total of 5,000 employees.

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Ever been to a casino and see someone in this all-too-familiar situation? They start losing money. The "strategy" isn't working. They don't stand up and walk, but keep throwing in more and more money, chasing after what's already gone.

Microsoft is in a very familiar situation, one that a lot of industry players face: spending resources to stay in a game they don't actually understand.

But this move is nothing new for MS. It's another in a long string of "chasing after" what's already long gone.

Barry Ritholtz puts it best:

http://www.ritholtz.com/blog/2012/01/microsoft-value-traps-and-the-paradigm-shift/

During the past decade, MSFT has returned exactly zero to investors, including dividends. They are a bloated bureaucracy run by a bloated bureaucrat. The paradigm has shifted, and they have failed to make the turn. They missed literally every major new technology, every innovation, every great idea from search to social to handhelds to tablets over that period.”

The Kinnect is certainly a hit, but its not the sort of product that moves the needle for a $234 billion company. X Box is also a consumer winner, but the firm spent billions to grab the franchise from Sony — with far less ROI than such a massive investment would or should ever warrant. Everything else from Online to Search to Social to portable music to even their well reviewed but 5 years too late cell phone — has been a bust. Their bread and butter franchises — Office, Windows and even SQL — are under assault from completely new product categories to which they have no response.

And on top of all that:

http://www.minyanville.com/business...floods-hard-drive-shortage/1/11/2012/id/38806

So what's going on here?

No doubt, Thailand had its impact on PC production levels, but it's also a convenient distraction from deeper, secular issues, namely Microsoft's lack of meaningful exposure to the mobile-device boom being dominated by the likes of Apple (AAPL), Google (GOOG), Samsung, and Amazon.com (AMZN). (See: Motorola Results Point to Apple, Samsung Dominance)

Now I realize that I'm once again putting on my Captain Obvious hat, but it looks like Microsoft is trying to soften the blow of a really, really lousy quarter for the Windows business by blaming Thailand. As in, HDD shortage or not, Microsoft was going to have one stinky quarter.

At the same time, my interest was piqued by a story from our buddies over at Bloomberg, indicating that Microsoft is on track for a major marketing shakeup, which could include the elimination of hundreds of jobs.

According to Bloomberg's Dina Bass:

"The changes would eliminate overlap in job responsibilities and are designed to help the company better respond to threats from Apple Inc., Google Inc. and Amazon.com Inc., which are increasingly targeting Microsoft’s corporate-computing customers. Chief Executive Officer Steve Ballmer doesn’t think the company is getting enough return on the billions it spends annually on marketing, the people said."​

All told, this batch of news indicates that Microsoft is in a serious state of flux, perhaps more so than we previously thought.

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It all boils down to this:

Microsoft is a company of lions led by donkeys. It's not the employees that need laying off. It's the management (and that includes Elop.)

 

[DingleButt]

Perfect. They needed some real change in that department.

BTW Elop isn't Microsoft and your "Zuning it" tag line means nothing in this thread.

 

[*LTD*]

Perfect. They needed some real change in that department.

BTW Elop isn't Microsoft and your "Zuning it" tag line means nothing in this thread.

Is it wrong to associate Microsoft with Nokia at this juncture? Absolutely not. Those two are joined at the hip now. "The Two Steves" (in contrast to THE Steve) don't seem to know what they're doing.

Nor is marketing the answer to their problems.

 

[thejadedmonkey]

Good. Microsoft's PR department is a joke. At this point, laying off their entire PR department is a potential PR stunt.

 

[Schtumple]

Whilst their PR has been terrible, that's not the staffs fault, they're led by crappy management as already said, it's not the 500 employees fault, it's the 5 managers who tell the 500 employees what to do every step of the way, throwing out one set of mindless drones and replacing them with another is going to do nothing, the same crappy management is in charge. Nothing will change.

 

[smoledman]

Whilst their PR has been terrible, that's not the staffs fault, they're led by crappy management as already said, it's not the 500 employees fault, it's the 5 managers who tell the 500 employees what to do every step of the way, throwing out one set of mindless drones and replacing them with another is going to do nothing, the same crappy management is in charge. Nothing will change.

This is why Microsoft will fail. Any company needs a visionary at CEO to thrive and Ballmer is a bean-counting joke.

 

[AppleScruff1]

This is why Microsoft will fail. Any company needs a visionary at CEO to thrive and Ballmer is a bean-counting joke.

They're doing horribly, aren't they?

 

[smoledman]

They're doing horribly, aren't they?

Considering they haven't brought a new massive profit engine online in over a decade, yeah.

 

[AppleScruff1]

Considering they haven't brought a new massive profit engine online in over a decade, yeah.

Even though they had record profits last quarter? And the most popular operating system in history with Windows 7? Yea, they're really on the verge of bankruptcy.

 

[*LTD*]

Even though they had record profits last quarter? And the most popular operating system in history with Windows 7? Yea, they're really on the verge of bankruptcy.

I don't think he means "fail" as in bankruptcy. He's referring to MS' slide into irrelevance amid new market realities which have got them by the short and curlies. It's happening before our very eyes.

 

[AppleScruff1]

I don't think he means "fail" as in bankruptcy. He's referring to MS' slide into irrelevance amid new market realities which have got them by the short and curlies. It's happening before our very eyes.

Yea, it really looks that way.

 

[smoledman]

I don't think he means "fail" as in bankruptcy. He's referring to MS' slide into irrelevance amid new market realities which have got them by the short and curlies. It's happening before our very eyes.

Sure everything looks hunky dory for MSFTies at the moment if you just look at their EBITA #s, but those numbers are set to plummet very soon. I can see a shell of MSFT continuing on, but not this bloated thing.

 

[Macman45]

This has been on the cards for a long time, but anyone who thinks MS are on the rocks is deluded to say the least.

I have no Windows products except one copy of Office for mac....Even that is full of bugs. The corporate market is not going to jump into Apple products over night.

Consider a medium sized business with 200+ PC installations, bulk licensing on Server software, Office etc.

The initial cost of the switch, coupled with inevitable teething issues AND compatibility with its clients make the change unappealing on the surface.

What MS is losing is its home market...it lost me, and quite a few friends a long time back, Sick and tired of the rip off. If Windows 8 does not deliver a better user expeirience, then more will leave.

Is the tide turning? Yes. But it's a slow process.

 

[AppleScruff1]

This has been on the cards for a long time, but anyone who thinks MS are on the rocks is deluded to say the least.

I have no Windows products except one copy of Office for mac....Even that is full of bugs. The corporate market is not going to jump into Apple products over night.

Consider a medium sized business with 200+ PC installations, bulk licensing on Server software, Office etc.

The initial cost of the switch, coupled with inevitable teething issues AND compatibility with its clients make the change unappealing on the surface.

What MS is losing is its home market...it lost me, and quite a few friends a long time back, Sick and tired of the rip off. If Windows 8 does not deliver a better user expeirience, then more will leave.

Is the tide turning? Yes. But it's a slow process.

Windows 7 delivers a good user experience.

 

[Macman45]

Windows 7 delivers a good user experience.

Well, if you say so, I have to disagree. But that discussion is for another thread!

Updates, AV, Anti malware etc, not to mention the bloated code and constant updates make it an unpleasant expeirience for me at least.

 

[AppleScruff1]

Well, if you say so, I have to disagree. But that discussion is for another thread!

Updates, AV, Anti malware etc, not to mention the bloated code and constant updates make it an unpleasant expeirience for me at least.

It may be for you, but there is ample evidence to the contrary. The updates are quite painless for Windows and have been since XP, IMHO. I'm not too bright so bloated code doesn't affect me. You do need a good av/anti malware program but there are a few excellent choices that require almost no user interaction and are virtually bulletproof.

This is not a knock on OSX at all. I feel that Windows 7 is every bit as good as OSX.

 

[Macman45]

It may be for you, but there is ample evidence to the contrary. The updates are quite painless for Windows and have been since XP, IMHO. I'm not too bright so bloated code doesn't affect me. You do need a good av/anti malware program but there are a few excellent choices that require almost no user interaction and are virtually bulletproof.

This is not a knock on OSX at all. I feel that Windows 7 is every bit as good as OSX.

I woul start a poll, but it would be unfair to do so here.....OSX would come out on top for obvious reasons.

May do a satisfaction survey on another Windows site though.....Now back to the topic in hand

 

[AppleScruff1]

I hate to see more people lose their jobs. The last 3+ years have been hard for millions of families in the US and around the world.

 

[notjustjay]

"We have to let go of the notion that for Apple to win, Microsoft has to lose."

 

[boss.king]

This is why Microsoft will fail. Any company needs a visionary at CEO to thrive and Ballmer is a bean-counting joke.

I don't know about that. MSFT looks to be lining up to take on Apple at the vertical integration game and give them a good scare. All their platforms will soon be linked very tightly and be able to share apps and media to a degree iOS and OSX should really have been able to for a while. Combine that with a full UI overhaul for 2 of their platforms and an incredibly promising mobile OS, and a horde of tablets ranging from low end to full on laptop replacements just to top it off, I'd say they have a pretty solid vision of wherethey want to go in the next few years.

 

[wonderspark]

Zuning

I don't see the point of arguing over Apple vs. _______. When you're on your deathbed, will you wished you'd convinced more people you were right?

 

[smoledman]

I don't know about that. MSFT looks to be lining up to take on Apple at the vertical integration game and give them a good scare. All their platforms will soon be linked very tightly and be able to share apps and media to a degree iOS and OSX should really have been able to for a while. Combine that with a full UI overhaul for 2 of their platforms and an incredibly promising mobile OS, and a horde of tablets ranging from low end to full on laptop replacements just to top it off, I'd say they have a pretty solid vision of wherethey want to go in the next few years.

The reason for Apple's dominance is 4 pillars that they fully control:

hardware, software, ecosystem & retail experience. Microsoft has software, ecosystem and they're building out the retail part with MS stores(only 11 so far). But they don't make the PC, phone or tablet hardware. That's not a problem if they can have a designated OEM that makes "premium" Windows machines whether they be phone, PC or tablets. But Microsoft is realistically the only company that can have any chance to prevent Apple from completely dominating this decade.

 

[boss.king]

The reason for Apple's dominance is 4 pillars that they fully control:

hardware, software, ecosystem & retail experience. Microsoft has software, ecosystem and they're building out the retail part with MS stores(only 11 so far). But they don't make the PC, phone or tablet hardware. That's not a problem if they can have a designated OEM that makes "premium" Windows machines whether they be phone, PC or tablets. But Microsoft is realistically the only company that can have any chance to prevent Apple from completely dominating this decade.

I see that as a strength though. Apple offers great hardware, but they don't offer variety. That's what the MSFT model allows for and many like that. I think as MSFT rolls out Windows 8 we will see more premium hardware options such as the Vizio hardware showed at CES. More and more, OEMs are are realizing that premium hardware is a good thing to offer, and I really feel that the first major player to offer a solid premium range (pro, home, laptop, tablet, and even phone) will have amazing success.

 

[Bernard SG]

I don't know about that. MSFT looks to be lining up to take on Apple at the vertical integration game and give them a good scare. All their platforms will soon be linked very tightly and be able to share apps and media to a degree iOS and OSX should really have been able to for a while. Combine that with a full UI overhaul for 2 of their platforms and an incredibly promising mobile OS, and a horde of tablets ranging from low end to full on laptop replacements just to top it off, I'd say they have a pretty solid vision of wherethey want to go in the next few years.

We visibly have different definitions of "vertical integration".

 

[boss.king]

We visibly have different definitions of "vertical integration".

How so?