Microsoft layoffs: Marketing, Office, partner groups all reportedly hit

By | July 7, 2010, 1:49pm PDT

Summary: A new round of Microsoft layoffs is, indeed, happening on July 7, as long-rumored and expected. Where are the cuts happening?

A new round of Microsoft layoffs is, indeed, happening on July 7, as long-rumored and expected.

According to various comments I’ve seen — all anonymous from those infamous “people knowledgeable about the situation” — the latest round is going to be less gruesome and more broadly spread than last year’s two waves of cuts that totaled more than 5,000 people.

I’ve been watching the growing stream of comments on the Mini Microsoft blog and gathering reports (direct and indirect) from individuals in the trenches today. It looks as if Microsoft’s Central Marketing Group (CMG), Enterprise Partner Group (EPG), the SharePoint/Office team and the search/advertising teams all have made cuts. Most of the cuts I’ve heard about have been in the marketing/sales organizations.

(The usual caveat, re: Mini Microsoft: Given the anonymous comments, it’s impossible to tell whether folks who are reporting in are real Microsoft employees or not. But based on other sources I’ve got — not to mention the relatively high accuracy rate last year, in terms of Mini Microsoft comments regarding which teams/products/projects got cut — , it sounds like the reports there are in line with what’s actually happening.)

So far, there’s no word on what the final tally is likely to be or whether there will be a follow-up Round 2 this year, like there was last year.

In a new blog post, published on July 6, Who Da’Punk (a k a Mini) shared more of the internal back-and-forth over Microsoft’s recent decision to pull the plug on the Kin (”Pink”) phones. So far, I haven’t heard any talk that members of the Kin team were “kinned” today as part of the new round of cuts. Supposedly, Microsoft is moving many of the Kin developers to the Windows Phone 7 team.

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Mary Jo has covered the tech industry for more than 25 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

Disclosure

Mary-Jo Foley

Freelance journalist/blogger Mary Jo Foley has nothing to disclose. WYSIWYG (what you see is what you get). I do not own Microsoft stock or stock in any of its partners or competitors. I have no business ventures that are sponsored by/funded by Microsoft or any of its partners or competitors.

Biography

Mary-Jo Foley

Mary Jo Foley has covered the tech industry for 25 years for a variety of publications, including ZDNet, eWeek and Baseline. She has kept close tabs on Microsoft strategy, products and technologies for the past 10 years. In the late 1990s, she penned the award-winning "At The Evil Empire" column for ZDNet, and more recently the Microsoft Watch blog for Ziff Davis.

Got a tip? Send her an email with your rants, rumors, tips and tattles. Confidentiality guaranteed.

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RE: Microsoft layoffs: Marketing, Office, partner groups all reportedly hit
dfwekrwe23-24353593454521329125748110264219 10th Nov
yjjqkx,good post!
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Marketing and Sales?
John Zern 7th Jul 2010
It makes sense, people just buy MS stuff, so not much need there, and marketing?

Who would have guessed that MS had a marketing dept? I never really saw them marketing things.
@John Zern: If people just bought MS stuff, as you put it, then why would they need to lay off anybody in the first place?
@Random_Walk

Zern's post is self-defeating.
@Random_Walk
Well so much for Bill Gates saying we NEED more foreign workers, because there are not enough in the states!!!
@John Zern

More marketing than Linux and Apple, it seems. They've started an ad campaign for Internet Explorer, and they're still advertising Windows and Bing.

Apple's ads seem to be dying off a bit. They're advertising their iPad and iPhone 4 more, but I'm not seeing much of anything else.

Linux has no ads that I can tell. If there's anybody who isn't marketing, it's Linux - and frankly, that's one of the main reasons they can't gain any market traction.
@John Zern Marketing - Yes I had a close friend also named Don that was high up in MS Marketing. But he quit because of Gates lack of social skills with his employees. I have seen video clips of him running a meeting - 4 letter words, hostility, and no respect for others.

D Zarlenga, PhD
@DrDZ - He probably acquired those 'skills' by osmosis from hanging around with Steve.
@DrDZ

Gates is believed by some to exhibit symptoms of Asperger's Disorder which is characterized by, among other things, a lack of innate social skills. Evidence is mounting for a fundamental neurological basis for this and similar disorders. For instance, search on "mirror neurons".
@DrDZ If there were any social skills, he would not have spent so much time at the computer...
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Amateur psychology abounds...
ahh so Updated - 8th Jul 2010
LOL... This has to be the funniest thread I've read in a long time. Asperger's Disorder?? You can't be serious.

more LOL... :D

While I admit I'm no fan of Gates and think he's a bit of an a_hole, I think the amateur psychology from you is ridiculous.

Did you tell Gates to seek help? I'm sure his billions will cover it.
@John Zern...
Not fully accurate. the O/S's and Office would suffer less if their MarCom teams diminished. But enterprise products and the full line of Dynamics ERP/accounting products don't sell themselves. (Independent) Certified Partners push hard for those sales, both to beat out competitors, and to help prospects buy now, not next year. And the prospects they court need to see sharp MarCom materials, snappy Web pages, AND compelling case studies showing the products' real business benefits.
@John Zern :
Actually, I find it mildly surprsing. Microsoft's strong points historically have been their marketing expertise. Much of their past success has been attributed by most of the analyzers as being the post that held the most benefit for them.
They'v had such massive realignments and reassignments of personnel I've a feeling it might mean they're going to strengthen their hype actually and streamline it for the future. They have too many people who have Petered out thanks to bad management and HR practices.
My opinion, anyway.
@John Zern

Sure, they are the brain trust that replaced low cost cardboard packages for retail software with the more expensive (cash and environmentally) hard plastic curvy containers for Office and Windows.

You know, the one that is an intelligence test: "...if you are not smart enough to open this box, don't worry about not being able to install it, you are not smart enough to use our software!"

And they are the group who "simplified" the Office 2010 product line by eliminating the upgrade option. Too bad they introduced the "no media, product key card only" versions at the same time. So much for a simplified product line. All they simplified was separating customers from more money. IE Home and student full version (with CD) costs ~USD150, allows install on 3 machines. "Cheaper" "Product key" version is ONLY USD130, but only allows install on 1 machine.

So customer "saves" USD20-30, for a single install, costs additional USD200 incremental for the other 2 installs.

MS "saves":
- cost of producing Install Media CD/DVD vs cardboard credit card sized key-card
- cost of packaging (Plastic box vs cardboard "holder")
- cost of shipping install media (guess-timate 20:1 in favor of media card)

Product Key cards sound like a solid marketing win! Too bad they got fired, sorry laid off, for doing a good job!
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A canary in the coal mine that's what this is.
OS Reload Updated - 7th Jul 2010
And the prelude of great things to come. Make yourself comfortable and enjoy the show. You will never forgive yourself if you miss The Triumphant Decline of Microsoft.

It will be a great show.
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Once again, Dream On...
Qbt 7th Jul 2010
@OS Reload

People have been predicting MS' decline for years, and those predictions always end up being a Big Fat Fail.
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So in your opinion MS is not in decline?
OS Reload Updated - 7th Jul 2010
@Qbt

Too bad so few in Redmond share your view. A little more complacency there would really help in speeding up the demise.
@OS Reload

No, they are not in decline at all. Trimming the fat is a good thing to do from time to time.

The mistake most of the idiots make that keep predicting MS's demise is that they think MS is a consumer company, when they are mostly focused on business software and services. So if you compare them to Apple, which is primarily a consumer company who has only a small line of successful products (iPhone, iPod Touch, iPad, iTunes), then yes, Apple looks great. Look at the big picture though, and MS is way more successful than Apple. None of Apple's other products are successful, unless you think a 5% OS marketshare is "successful".
@OS Reload

Reality Check:

The cuts currently being considered are along the lines of the company's historical pattern, in which it undergoes a yearly reshuffling that sometimes results in jobs being cut in some areas at the same time new positions are added in other areas, the source told CNET.

http://news.cnet.com/8301-13860_3-20009798-56.html
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@Qbt

just look at the kin. MS is most definitely not a consumer company, consumers don't voluntarily pick MS stuff.

Despite the xbox the rest of us already knew MS is not a consumer company.
@Qbt

So if you compare them to Apple, which is primarily a consumer company who has only a small line of successful products (iPhone, iPod Touch, iPad, iTunes), then yes, Apple looks great. Look at the big picture though, and MS is way more successful than Apple.

MSFT market cap: $212B
AAPL market cap: $235B
@Yagotta B. Kidding

LOL, if you think market cap is the way to measure a company's overall performance or profit then you are pretty dense. But then again, that seems to be requirement to be a Steve Jobs Worshipper.
@OS Reload... last time I checked, Windows is the biggest gaming platform outside of the major consoles (and possibly bigger in spite of them, depending how you measure)... so claiming it's not geared for consumers is just like the rest of your Microsoft analysis... pure fiction.
@Yagotta B. Kidding: I agree with Qbt, market cap is a really poor way identify the success of a company, it's one but but far, far from the only way.
@Qbt And this article brings no solvency to those predictions either. Just chiming in.
ITs funny that people keep comparing a software company (MS) with a hardware company (Apple).

It interesting to note that their sales numbers are close considering Apple is selling high margin hardware, wile MS sell low margin software.
MS is obviouslly selling more of their products to more people, so not sure what you're getting at?
@Qbt
You're entitled to your opinion, but mine is on the other side. Everything from stock to sales shows the declines. Some weren't even as bad as MS had predicted themselves.
It's business as usual; guarding the bottom line and perpetuity but it's a hard job once you corner yourself like they did.
@Qbt

By several measures, Microsoft has been in decline for several years now. The typical decline for a large corporation is a matter of decades. They usually try to mask it by buying smaller companies. The tell tale is that with the mergers and acquisitions, they still have a similar head count after it is all done.

Microsoft is not alone in this. Look at HP, now no bigger than after the merger with Compaq. That is a near 50% decline in head count of the two companies before the merger.

Microsoft IS declining. But, the decline is slow. It's a long way down. It will take a long while.

Microsoft has lost supercomputers to Linux.

Microsoft has lost phones to Apple and Google. Nokia is still the worldwide champ there.

Microsoft paid a heavy price to get manufacturers to take Linux off of netbooks.

They have paid a heavy price to compete with Sony and nintendo in games.

They have paid a heavy price to compete with Google in search.

They have paid a heavy price to continue with Hotmail.

They paid a heavy price to defeat Netscape, and now have Mozilla and Chrome to contend with. They spend hundreds of Millions of Dollars trying to keep up with IE. Yet that is a product that gives them no revenue.

All of these lose them money. every year. Only Office and Windows pay.

The stock price has gone down. Apple is now worth more than Microsoft by Wall Street's standards. Microsoft is not going to go away quickly, but they are going downhill. The Layoffs are just a reflection of the reality.
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@Qbt -- Microsoft isn't going away any time soon, but clearly, Microsoft is no longer a growth company. Even though Microsoft still generates a ton of cash, its stock price may be pointing the way to its future. So if you don't own any Microsoft stock, good for you.
@OS Reload

Microsoft's fiscal year just ended, and when their earnings report is published in a few weeks, you will see 2 things:

1. Revenue and profit are GROWING year over year
2. Microsoft is one of the most profitable companies on the face of the earth. More profitable than Google and Apple combined.

Personally, I feel those 2 facts make it a bit problematic to call them a company in decline, but hey, that's just me. You're free to think whatever you want, just don't expect me to agree with your views unless you have some data that you'd like to share with the class. And not just jokes about the Kin, I mean show me some real data and / or trends. Because what I see is totally opposite. Windows 7 is the fastest selling OS ever, Xbox is closing in on being a billion dollar business by itself, Office 2010 was their most broadly downloaded beta in history, analysts have great things to say about Windows Phone 7, Windows Server share continues to grow and is taking share away from Linux servers, SQL server share continues to outpace Oracle, etc etc. Do I need to go on?

Seriously...cough up some data to support your decline of Microsoft theory. Because the data shows a healthy, growing company.
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Yes, and no...
GoodThings2Life 7th Jul 2010
@Sproket560 ... for what it's worth you're MOSTLY right, but to say they're more profitable than both Apple and Google combined is incorrect. It was recently posted that Microsoft's net income is around $14-15 billion while Google is around $10-11 billion and Apple is $9-10 billion.

Anyway, the point remains that to say that Microsoft is on the decline is just incompetent, and makes me think that OS Reload's biggest accomplishment each day is managing to waste posts on here, because I know he's not an accountant or his ability to forecast financial results would be improved, and if he's an IT guy he is surely mismanaging his systems. (I'd apologize for the personal criticism, but frankly, his posts are constantly flame bait, so he pretty much asks for it.)
@Sproket560

Microsoft is one of the most profitable companies on the face of the earth.

Yeah, they have $46B annual gross profit. That's almost 60% of General Electric's $78B and almost 40% of ExxonMobile's $125B.
@Yagotta ... Precisely.
@GoodThings2Life....actually, Sproket560 was right about Microsoft being more profitable than google and apple combined. he has has said that you should put up data and not just run off your mouths like you always do.

however, now for some data:
go to: http://finance.yahoo.com/q?s=aapl
and on the left hand side click the "Income Statement" link....and look at the net income for the year
do the same for goog (google), and msft (microsoft)
you will see that, apple's net income was $8,235,000
google's net income was $6,520,448
at those up you get: $14755448

when you do Microsoft you will see that they made: $14,569,000

when someone asks for data, please use data and don't just run off your mouth as if you know what you're talking about.
@blazing_smiley_face - Nicely done.
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So then, Yagotta B. Kidding
John Zern 8th Jul 2010
Apple isn't profitable either? I ask because you showed both MS's and Apple market cap earlier, just trying to get a bead on what you're trying to say.
@OS Reload If you have a few billion dollars to donate to the worldwide business community to changeover their hardware and software systems and retrain their workers then you can start talking about the demise of Microsoft. Ha
@OS Reload
If Microsoft declines another one would take its place in no time, don't worry happy
@OS Reload

I understand the sentiment towards Microsoft. After all they have releasing for so many years products that have cause so many headaches. On the other side, they were a big part of bringing the computer industry where it is today. What really bugs me with posts like this is that it seems not to matter that real Americans losing their jobs! I don?t think they will be gained easily. It is more likely that these jobs are shipped overseas to competitors. There is more space in the industry then just Apple and Google. Even more so we should root for our own!
No surprise..
I am thinking.. Other companies have moved far ahead very quickly and Microsoft is late to the party. They may have missed the boat on next innovation cycle.

I strongly believe - management at Microsoft brought this situation on them. Their hiring process is broken and talent retention is not to be seen, good talent is leaving at a faster pace. With all this, how can someone expect them to innovate.

http://twitter.com/thyaga
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Good Talent Always Comes and Goes
GoodThings2Life 7th Jul 2010
@ThyagaV ... you know, everyone I work with tells me I have great talent for what I do. Right or wrong, I still left previous jobs to no fault of those businesses in some cases and great fault in others. That's just how it goes. You always seek out the job that you fit in the best, and if you don't fit in, you leave.
From what I know of the pressures and subsequent health toll on MS employees (just talk to health proffessionals in the Seattle area) I can't help wondering if the staff who have been 'let go' are the lucky ones in the long run.
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For those of us who avoid Seattle...
GoodThings2Life 7th Jul 2010
@healdp ... maybe you could share a bit of factual information/proof/evidence to support your hypothesis?
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RE: Microsoft layoffs: Marketing, Office, partner groups all reportedly hit
de-void-21165590650301806002836337787023 7th Jul 2010
@healdp - I think it safe to say that NOBODY who loses their job unexpectedly is "lucky".

Finding a new job in a normal economic climate is one thing. Finding a new job these days is a whole different ball game.

To all those at MS and other companies around the globe who find themselves out of work, I for one extend my heartfelt "good luck".
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No data, but anecdotal evidence
HollywoodDog 8th Jul 2010
@healdp ... back in the day when I dealt with them, a low level manager at Microsoft told me that his dissheveled demeanor was due to his working two to three days straight on campus without sleep. He indicated that was not uncommon, and people who didn't do it were viewed suspiciously.
Fortunately today I work for a company with a stated intention of promoting "a healthy work/life balance."
This was a novelty to me at first, but I now realize that what it really means is that it creates a sustainable environment, which doesn't rely on burning people out, throwing them away and hiring new ones.
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More Kin numbers
symbolset 7th Jul 2010
"Elcoteq has already delivered to Sharp the Kin smartphones for the U.S. markets with revenues amounting to more than one-third of the original guidance for Sharp business in 2010," it said in a statement, adding that the total guidance for the Sharp business came to 150 million euros ($183.5 million).

Source: Reuters. http://www.reuters.com/article/idUSLDE6601O020100701

1/3 of $183M is $61M. In the article Sharp is said to have spent more than this much to Elcoteq for the initial shipment of Kin Phones. Divide by your favorite manufacturing cost to get the number of units shipped. Make of that what you will. There's no word on if Sharp's losses were backstopped. Sharp stock hasn't taken a hit over this yet.

It seems likely that somewhere on Earth there's at least one warehouse with aisles of stacks of pallets of Kin phones. Given the current frenzy for Kin news, I'll bet a photo of that place is worth a pretty penny.
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You might have missed this...
epitax 8th Jul 2010
....If you're still convinced that MS is *not* on the decline.

http://www.nytimes.com/2010/07/05/technology/05soft.html?_r=1

And don't forget this:

http://www.zdnet.com/blog/saas/why-microsoft-really-really-hates-the-cloud/1014

If that isn't enough, then you may need to adjust your medication.
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So unconvincing . . .
CobraA1 8th Jul 2010
@epitax

"...If you're still convinced that MS is *not* on the decline."

Microsoft was never strong on phones to begin with. That they are still struggling doesn't surprise anybody.

So the failure of an item that was never a big chunk of Microsoft's market means the entire company failing?

"And don't forget this:"

An outdated article that doesn't account for the now-released Office 2010 which includes a whole host of cloud features, and doesn't account for the latest wave of Windows Live, either.

Turns out that Microsoft has larger plans for the cloud than Phil ever understood.

"If that isn't enough, then you may need to adjust your medication."

I suggest you adjust yours.
@CobraA1 Ouch - nicely done as well, but - Ouch.
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@CobraA1

Excuse me, but the world is collaborating on open source software. I see MS hiding behind FUD, patents and anything else they can get their hands on to stop it. So it's only a matter of time as young developers notice all the free platforms to work with.

Besides, MS is really nothing more than a government supported monopoly. Witness their tax breaks and other incentives just to stay where they are. And if it were up to me (sometimes it is), I'd rather not rely upon a company that is going to make me upgrade so I can help them send their kids to another year of college.

MS had their monopoly and now it's decomposing, slowly but surely. Good riddance.

BTW, I noticed that you were careful enough to criticize my links without providing supporting links of your own. FUD, perhaps?
Well, I am not surprised, you sell animal based fertilizer and call it Ice Cream. The users now have great alternatives with Apple, Google and even Yahoo. Live is even better than not so hotmail.

They have for years release poor products. Even professional organizations that teach MS products admit to the constant lack of standards. They change menu items in places where one would last look.

It is unbelievable that they have lasted this far.

D Zarlenga PhD
Theoretical Physics
fm:University of California

Strong technologist, IT, Telecomm, MAN, WAN and LAN - through real leadership that helps others become leaders as well. I do not see real leaders in most corporations at the top - I know a few but they are in the minority. The drive for lust of money and power get people high in the organization that prove the Peter Principle.

D Zarlenga, PhD
Theoretical Physics
fm: University of California
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RE: Microsoft layoffs: Marketing, Office, partner groups all reportedly hit
dfwekrwe23-24353593454521329125748110264219 10th Nov
yjjqkx,good post!

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