back to article Bloodthirsty Microsoft prepares for imminent 'major' job cuts

Microsoft is sharpening the axe for a "major" round of job cuts, according to a report. The New York Times reckons on a fresh round of layoffs on Wednesday (July 8) but there were no more details. Microsoft is reported to have not commented. Any cuts would come on top of the 18,000 already drawn up. Cuts are expected to fall …

  1. Anonymous Coward
    Anonymous Coward

    When will MS stop flushing monopoly cash down the toilet by betting on lemons and actually spend that cash on properly revamping it's creaky and ageing OS.

    1. Anonymous Coward
      Anonymous Coward

      Never

      It is an artefact of the way the market is setup in the USA.

      If it keeps the cash and it's stock drops for whatever reason the valuation will end up being less than the assets. In that case it can be taken over and disassembled by Eliotts and their bretheren which will deliver "value to the shareholders" and leave the carcass to the vultures.

      If it posts it as a dividend it will end up paying corporate taxes along the way. This is different from most of Europe where not paying dividend in some regulatory domains/countries for more than X amount of time is leads to some pretty nasty accounting consequences. USA is the opposite and Microsoft is prime example - it paid its first dividend more than a decade after becoming a listed company. Some other listed companies are yet to pay a dividend 18 years after their IPO (hello Amazon).

      So for a listed USA company it is better to flush an occasional cash surplus down the acquisition drain and/or buyback stock. That is what every large company in the USA does nowdays.

    2. hplasm
      Devil

      "When will MS stop flushing monopoly cash down the toilet"

      They do say "Follow the money", in this case, they are going down the drain after it!

    3. W T Riker

      Or fixing all of those "features" left over from Word 6 and Excel 4, that they have no interest in tackling.

  2. Anonymous Coward
    Anonymous Coward

    Wasting cash

    I'd like to understand how these Execs make an absolute fortune in salary, bonus and shares, whilst pissing away cash on companies they ultimately 'write down' as less valuable than what they paid for them to the tune of BILLIONS of dollars. Cisco did the same with Flip video, HP with Autonomy.

    The Execs are at best incompetent, and at worst, criminally stupid.

    1. Charlie Clark Silver badge

      Re: Wasting cash

      Because the Board, which represents the interests of shareholders let them. The share price has stayed up and profits have continued to roll in. Conclusion: the majority of shareholders were happy with what the company was doing.

      Of course, another reason for the purchase was that the purchases were made with overseas profits which would have been wiped out if they had been repatriated. At least Microsoft got some tangible assets and some, but not much, IP with the money. And who knows, maybe some of those shareholders happy with the company had shares in the companies that were bought. Maybe they were happy because they got to cash in at a low tax rate?

      1. Anonymous Coward
        Anonymous Coward

        Re: Wasting cash

        @ charlie

        Well the profits are getting wiped out by these losses, they might as well have bought Greek sovereign debt. Poor investment choices followed by equally poor management which always seems to happen in a large cash rich business, eventually the incompetence and laziness catches up. Classic diseconomies of scale.

        1. Charlie Clark Silver badge

          Re: Wasting cash

          Well the profits are getting wiped out by these losses,

          Great, this reduces the tax burden. Shareholders have been encouraged to care more about the share price: almost exactly the same as it was a year ago and nearly twice what it was 5 years ago.

          they might as well have bought Greek sovereign debt.

          Nope, no tangible assets to be got in the process.

          1. Anonymous Coward
            Anonymous Coward

            Re: Wasting cash

            Erm not really charlie

            Q1 (Mar '15) 2014

            Net profit margin 22.94% 25.42%

            Operating margin 29.91% 31.85%

            EBITD margin - N/A 38.12%

            Return on average assets 11.38% 14.02%

            Return on average equity 21.97% 26.17%

      2. Anonymous Coward
        Anonymous Coward

        Re: Wasting cash

        Conclusion: the majority of shareholders were happy with what the company was doing

        I disagree. I'd suggest the majority of the shareholders acquiesce to what the board are doing.

        The majority of big corporate shareholders are invariably gambling with other people's money, and tend to offer their votes to the board's proxy (a practice that IMHO should be illegal), and individual retail shareholders fall into multiple buckets - day traders that only have an interest in volatility, passive buy and hold investors who (perhaps foolishly) trust the board, options traders who may want the board to make bad decisions, unit trust holders whose only interest is market momentum etc, many of whom will either not vote or go with the board proxy.

  3. Neil Barnes Silver badge
    Paris Hilton

    Is this because

    we've all been so rude about W10?

  4. knarf

    Short Sighted Agent

    MS keeps doing this, invest big then if there is no short term gain then cash out. Stupid MS

    1. Zippy's Sausage Factory

      Re: Short Sighted Agent

      It's classic MBA behaviour. This is exactly what they teach you to do on an MBA - and it's a reason why every MBA I've ever met seems to know how to measure everything, work out how much it costs but has no clue about strategic thinking or how to build a business, merely how to build a great big rut with minimal profit margin and then wonder why it doesn't last...

  5. Steve Davies 3 Silver badge

    Perhaps this is to disguise some other bad news?

    such as W10 is a lemon and the BOD already knows it?

    "Yes, the OS may not have been received very well but we are reducing our overheads. Isn't that great news?"

    Or is the Headcount reduction needed to pay for the free upgrades that are offering?

    1. Anonymous Coward
      Anonymous Coward

      Re: Perhaps this is to disguise some other bad news?

      "such as W10 is a lemon and the BOD already knows it?"

      It's not the steaming turd W8/W8.1 was nor is it as vomit inducing as Server 2012. All of those were a run-away success.

      Although that's probably more to do with OEM-abuse and leveraging their monopoly than any actual merit.

      1. theOtherJT

        Re: Perhaps this is to disguise some other bad news?

        It's not the steaming turd W8/W8.1 was nor is it as vomit inducing as Server 2012.

        In principle, probably not, but in execution it's looking scarily like it might actually be worse. Instead of a Moskvitch built like a Bentley*, it looks like we might be getting a Bentley built like a Moskvitch. All good stuff in theory, but bits keep falling off and breaking all the time.

        *Although their track record on build quality isn't exactly perfect...

      2. Anonymous Coward
        Anonymous Coward

        Re: Perhaps this is to disguise some other bad news?

        "vomit inducing as Server 2012"

        I thought Server 2012 was great. No GUI, and managed by a shell like Linux (or by remote GUI tools). But the shell is much more powerful and the OS generally much easier to use than Linux.

  6. bpfh Silver badge
    Devil

    "Microsoft is pulling out of display ads and will hand operations to AOL and AppNexus"

    AOL still exists?

    1. Anonymous Coward
      Anonymous Coward

      Re: "Microsoft is pulling out of display ads and will hand operations to AOL and AppNexus"

      If only AOL had some way of advertising the fact......

  7. John Sanders
    Holmes

    Short Sighted

    When you are a company the size of MS with virtually unlimited money income. (MS is still a monopoly)

    You can afford to lose a lot buying other companies:

    You are sufficiently big and have enough employees and subsidiaries to make something clever and worthwhile with regards to taxation and regulations.

    You spend a lot of money in exchange of a brand and a customer base and to lesser extend expertise, the customer base specially if the brand is strong is worth potentially way more than what you paid for the sum of the entire company you are buying. You have the new customer's base full attention, the best marketing ever.

    If you succeed in conquering another large market and get entrenched, the benefits usually dwarf the costs. And you look mightier than ever.

    Also with MS there is the "prepotency" factor.

    MS is used to everybody being afraid of them and to use and abuse their power to further their goals.

    1. TheOtherHobbes

      Re: Short Sighted

      >If you succeed in conquering another large market and get entrenched, the benefits usually dwarf the costs. And you look mightier than ever.

      When was the last time MS did this?

      The mobile phone fiasco was the opposite - buy a name, buy the workers, screw around for a bit, fire everyone.

      And the original owner of the name will pick it up a year or so from now, and carry on as if nothing happened - having allowed Microsoft to do the nasty work of downsizing all those employees that were being mismanaged into non-productivity.

    2. Pascal Monett Silver badge
      Trollface

      Re: MS is used to everybody being afraid of them

      I think that's over now. We now what MS is : an OS company that is desperately running behind the times.

      Google is our new overlord now.

  8. earl grey Silver badge
    Flame

    so they've dropped all their H1B requests?

    Thought not.

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