Microsoft to tweak employee benefits and more news of the week

Microsoft to tweak employee benefits and more news of the week

Summary: A "surprise" employee-only Town Hall meeting on benefits, the departure of a 24-year veteran Microsoft Technical Fellow and other tidbits round out this week in Microsoft news.

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It's been a crazy week for us Microsoft watchers. Microsoft stock started the week tanking based on a couple of Wall Street reports questioning the company's strategy and growth prospects. Then there was an employee study (based on a sample of 1,000 of the company's 90,000 or so employees) that found only half of all Softies approved of the performance of big-boss Steve Ballmer. Speaking of Ballmer, his comments this week on Windows slates hitting the market before Christmas set off a new round of nothing-new reports. And we're ending the week with Microsoft stock rising a bit, after a number of analysts threw cold water on speculation that Microsoft might be in the market to buy Adobe.

But the week's not over yet. Here's some more Microsoft news that's worth noting....

Microsoft is holding a "surprise" employee Town Meeting on October 8 where the subject is "the evolution of U.S. benefits." There's been some speculation on the Mini-Microsoft blog that the news isn't going to be good and that cuts are coming which may or may not appease Wall Street analysts looking for deeper savings. No word yet on whether free Talking Rain sodas, health benefits, or what may be on the chopping block.... I've asked Microsoft for comment and received no word back. If I hear any specifics, I'll provide an update.

Update No. 1: Microsoft told employees that it will be phasing in changes to its health plan over the next two years, according to reports I'm getting.

In 2013, employees will start be required to share part their health costs. For the next two years, current programs will remain in place, but after that there will be cost sharing with out-of-pocket maximums coming, starting at between $1,000 and $2,500 for catastrophic illnesses, I am hearing. Microsoft is encouraging its employees to set up health savings accounts to offset the changes.

To this point, Microsoft has offered its employees generous health coverage benefits -- even after cuts it made in 2004.

Update No. 2: Here's Microsoft's official statement from a company spokesperson: "Microsoft has begun to evolve its employee health care benefit. There will be no changes for the next two years, but in 2013, employees will contribute to their health care. A guiding principle in this evolution is that Microsoft will continue to offer market-leading health and wellness benefits that rank among the best in the country."

Microsoft Technical Fellow Brad Lovering has flown the Redmond coop. Microsoft is confirming that 24-plus-year Microsoft veteran and Technical Fellow Lovering left the company as of October 1 for "personal reasons." Lovering is another of the execs who was instrumental in constructing Microsoft's Oslo modeling strategy, which is in the midst of being deconstructed. When I interviewed Lovering in 2008, he was looking forward to working on Version 2 of Oslo. One of the only remaining new pieces of Oslo is the M language, and Microsoft isn't talking about what's going on with that, at this point. OData is the primary  focus of many of those who were working on Oslo, it seems.

The Windows 7 Family Pack is back -- until supplies run out (again). As of October 3, Microsoft reinstuted the deal via which users can buy Windows 7 Home Premium for $149.99 and install it on up to three PCs. For those outside the U.S., the Family Pack will be available for purchase on or after Oct. 22 in select countries. One of Microsoft's ERP product families will be getting an update in the second quarter of 2011. Dynamics SL 2011, which is focused at mid-size companies, will be shipping in the U.S., Canada and Puerto Rico by then. The new version will include Role-based functionality, as well as with Microsoft Project Server 2010, Microsoft SharePoint 2010, Microsoft Office 2010, Microsoft SQL Server 2008 R2 and Microsoft Dynamics CRM through Web Services, according to the Softies.

Topics: IT Employment, Banking, CXO, Enterprise Software, Legal, Microsoft, Operating Systems, Software, Windows

About

Mary Jo has covered the tech industry for 30 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).

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27 comments
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  • Sounds like Microsoft is floundering.

    NT.
    DonnieBoy
    • RE: Microsoft to tweak employee benefits and more news of the week

      @DonnieBoy
      They've been floundering for the past 10 years. What's your point?
      rjohn05
      • That they continue to flounder.

        NT.
        DonnieBoy
    • ZDNet, you've got a forum bug...

      It seems that posts from the late 90s are somehow reposting themselves well over a decade later. Probably want to get on that.
      KTLA
    • Yikes!! What does that say about Apple!!

      @DonnieBoy
      Since MS makes more revenue and profit than Apple, and MS is floundering (according to you), does that mean you believe Apple is just about to go bankrupt?
      NonZealot
      • More revenue does not equate to more profit.

        @NonZealot... Apple runs on a 30% profit margin on the products they sell, MSFT has to sell Windows XP for notebooks at a near loss. So while Apple only has about 10% market penetration they are doing quite well, one could argue in terms of profitability better than MSFT.

        It is a prime case of cutting off your nose to spite your face. When you cut your profit margin so deep that while you are taking market penetration to the max, you are doing so at the loss of profit.

        Microsoft is a lot like Walmart. Sure when you have squashed most if not all of the local competition, it gets even harder to improve profits and sales. Whereas if you have a healthy profit margin, you only need a small amount of market penetration, be in a market with several competitors, and can still be quite successful. And only making small percentage gains in market penetration can translate into larger profits, as there is still a large market at play.

        Glad you aren't running major company, you would send investors running.
        Snooki_smoosh_smoosh
      • LOL LOL LOL!!!!! HAHAHAHAHAHA!!!!!!!!!

        [i]Apple runs on a 30% profit margin on the products they sell, MSFT has to sell Windows XP for notebooks at a near loss.[/i]

        Are you trying to tell me that a company with 1,000,000,000% profit margin on sales of 2 cents is better than a company with 0.1% profit margin on sales of $999,999,999,999,999,999,999?

        HAHAHAHAHA!!!!!! HAHAHAHA!!!!!! HAHAHAHA!!!!!!!

        [i]It is a prime case of cutting off your nose to spite your face.[/i]

        Yeah but since a company's primary purpose is to make profit, the fact that they've cut off their nose and can't smell the stink in your post doesn't affect them at all!!

        [i]And only making small percentage gains in market penetration can translate into larger profits[/i]

        So what you are saying is that it is better to have the [b]potential[/b] of larger profits than to actually [b]have[/b] larger profits.

        HAHAHAHAHAHA!!!!!! HAHAHAHAHAHA!!!!!!!!!!!!!

        [i]Glad you aren't running major company[/i]

        Yeah, ditto.
        NonZealot
      • Oh, and a PS

        [i]MSFT has to sell Windows XP for notebooks at a near loss[/i]

        Proof please!

        The truth of the matter is that it costs MS close to $0 to license XP. You would need to provide a lot of proof if you want to suggest that MS is even coming close to losing money on XP sales.

        In other words, while you were ranting and raving about how great Apple's 30% profit margin, you neglected to take into account that MS actually makes a higher profit margin on most of its products than Apple does. Suck on these links:
        http://finance.yahoo.com/q/ks?s=AAPL+Key+Statistics
        [i]Profit Margin (ttm): 21.44%
        EBITDA (ttm): 17.50B[/i]

        http://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics
        [i]Profit Margin (ttm): 30.02%
        EBITDA (ttm): 27.20B[/i]

        And in 3... 2... 1... we will find out that profit margin is suddenly [b]not[/b] that important.
        NonZealot
      • RE: Microsoft to tweak employee benefits and more news of the week

        @JM1981...

        Go back to school (or stay in school) before you try to do anything in business. Your Windows XP example is one of the dumbest things I've ever read. Here's how it works. Microsoft spent a lot of money building Windows XP...almost 10 years ago. Since then they have spent very little...they did a few service packs, they fix bugs. Those costs are negligible. For all intents and purposes, the "costs" for Microsoft in creating Windows XP ended years ago. That means that evey time they sell a copy of Windows XP today it is pure profit. In business lingo, they talk about marginal cost. The marginal cost of each additional copy of Windows XP is the cost of a disc...and that is rarely an issue since most copies of Windows are pre-installed on PC's. The same concept generally applies to Windows Vista and Windows 7. Once the engineering costs are sunk, the sustaining engineering costs are minimal. I have no idea what margins Microsoft makes on Windows but my guess is that it is probably one of the most profitable businesses in the history of the world.
        marksashton
  • Times are a changing...

    ...and it doesn't look good. There are still some bright spots - Windows 7, Office 2010, Windows Server 2008 R2, Exchange 2010, Microsoft Stores, Windows Live Essentials. I think if Microsoft can build on these products while also providing immediate value and not just upgrade for upgrade sake I think they will continue to be in good standing with consumers and shareholders. Oh, and a better mobile and Tablet strategy. (WP7/Windows 8)
    Mr. Dee
    • RE: Microsoft to tweak employee benefits and more news of the week

      @Mr. Dee

      MS Stores = Let's rip Apple off and hope it works.

      I know few that hold Microsoft in high regard. Most equate Microsoft with a Cancer.
      itguy08
      • RE: Microsoft to tweak employee benefits and more news of the week

        @itguy08

        Seems like this article more reflects the bad economy and the riches that ms employees have had for so long are changing. However the rest of us have had this for years or always. MS products are not relevant here no rants we have enough of this here
        MLHACK
      • RE: Microsoft to tweak employee benefits and more news of the week

        @itguy08 Apple Stores = let's rip off "The Gap" aesthetic and hire all "The Gap" employees! You Apple-tards really piss me off.
        MSFTWorshipper
  • RE: Microsoft to tweak employee benefits and more news of the week

    I think the bigger picture here is that even the all mightly Microsoft is feeling the impacts of the horrible economy. He*l i remember when i did not have to pay for my medical coverage only had the co-pays wow those were the days(2003) since then i have had higher co-pays higher % out of my pay etc. However my paycheck is not keeping pace with these higher costs. i work so a small company about 40 total employees.
    MLHACK
    • RE: Microsoft to tweak employee benefits and more news of the week

      @MLHACK To still be raking in $5 billion profit a quarter in this rough economy is pretty damn good. With Windows Phone 7 and other good things coming down the pipe(Azure), things are going to improve. MSFT could use a significant staff reduction. Apple only has 40K employees compared to 90K for MSFT. How many of those are doing nothing?
      MSFTWorshipper
  • I see cuts coming

    Stocks not doing well, borrowing money, half of employees not happy with the boss, People leaving. <br><br>Take away free sodas then what.<br><br>"Riding with Penguins Through a World of Glass and Fruit"<br><br>Hooay!
    daikon
    • RE: Microsoft to tweak employee benefits and more news of the week

      @Linux Rocks

      World of Glass and Fruit??? HUH ! This is and economy issue linux feels this as well the whole free free free is great but it is like what you daddy tells you NOTHING IN LIFE IS FOR FREE. Someone somewhere has to pickup the tab.
      MLHACK
      • RE: Microsoft to tweak employee benefits and more news of the week

        @MLHACK

        Its free as in Freedom, not as in free soda.

        I never heard my dad say that, he passed away when I was little.

        "Riding with Penguins Through a World of Glass and Fruit"

        Hooay!
        daikon
    • RE: Microsoft to tweak employee benefits and more news of the week

      @Linux Rocks

      Linux really rocks, ha! Stupidity doesn't last forever, i can asure you.
      jk_10
      • RE: Microsoft to tweak employee benefits and more news of the week

        @jk_10

        The most abundant things in the universe are hydrogen, stupidity and opinions.

        "Riding with Penguins Through a World of Glass and Fruit"

        Hooay!
        daikon