Microsoft lays off 2,100, axes Silicon Valley research | Hacker News Reader

Microsoft lays off 2,100, axes Silicon Valley research

in.reuters.com

96 pointsGarbage32 comments

The logic of spreading out layoffs over the corse of an entire year escapes me. Particularly when it's the first year of a new CEO. What are they thinking?

I have to wonder if they're not trying to speed up the rate of voluntary exits.

Definitely. If you quit, you don't get unemployment insurance benefits.

Microsoft is trading morale for money.

Or they give people a chance to find something else.

That doesn't make sense. People would either get new jobs or coast till layoff. No one preemptively quits to do nothing because they fear a layoff.

It would make sense to do it this way if these voluntary exits are a thing. Are they? Are they not? I'd love to learn more about this type of situation.

I would not think people would simply quit. They'd basically start to look for a job to beat the effect of all those other people being in the water. Of course this is no great secret so it might already be as if those people were in the water.

(this thread is a dupe) https://news.ycombinator.com/item?id=8336954

That thread is also a dupe: https://news.ycombinator.com/item?id=8336033, but it really doesn't matter in the end.

I have been to one of the campuses few times (working as a contractor with newly transfered employees) - they said themselves - Microsoft was like communist country:

-extraordinary social

-very low performance targets

-completely guaranteed work

-overspending on servicing employees (renting them cars, providing accommodations, even giving out quick loans to those that needed)

This was hurting the market, finally seems to be over.

I wonder how much of the workforce was employed in Nokia directly though.

Curious. I've not heard of this.

Skype/Yammer kept some of their pre-acquisition perks -- food, snacks, services (that you have to pay for) on-site. This? Nope.

It's weird. We have this notion in America that corporations are (or are supposed to be) efficient. They're not. Markets are if you grant a series of tenuous assumptions. Markets are the fair efficient competition between unfair and inefficient firms.

Yeah, if anything, corporations are islands of communism where resources are distributed by central planners (i.e. executive management). And it has been proven over and over that central planning is a horribly inefficient way to distribute resources.

Markets involve search costs, planning involves calculation costs.

Sometimes one exceeds the other, so one form of allocation emerges over the other: http://en.wikipedia.org/wiki/The_Nature_of_the_Firm

Good comment, jacques. The Wiki link is to the key Nobel Memorial Prize-winning paper on exactly the mystery the gp and ggp and gggp were trying to express. Coase clarifies and organizes the question of organizational inefficiency in firms in a market with a lightning flash of deep insight that changes the way you think forever.

And the paper is short.

Full text http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0335.1937....

If central planning is so inefficient, why are centrally planned mega-corporations beating the crap out of ad-hoc networks of smaller companies in retail (for example)?

its a combination of economies of scale and they can force regulations too costly to compete at on on smaller scales, which I suppose is another economy of scale.

Preferential tax treatment for in-firm transactions, regulatory capture, and economies of scale, and subsidies from small profitable corners.

> economies of scale

So what you're saying is that it's actually more efficient?

> subsidies from small profitable corners

The inefficient parts subsidize already efficient parts making both parts more efficient in the process.

>>So what you're saying is that it's actually more efficient?

No. Simply put, there are different types of efficiency. The term "economies of scale" refers to spreading the fixed costs of production among a greater number of units of output. They are about production efficiency, and to a lesser extent, operational efficiency.

What we are talking about here is efficiency when it comes to the allocation of resources across different business units. Central planning is very inefficient in this regard.

>>The inefficient parts subsidize already efficient parts making both parts more efficient in the process.

No one is arguing that this is not the case. What might be true, however, is that we may not need some of those inefficiencies in the first place. Our current and most popular model of corporation involves central planners. This doesn't necessarily mean that we won't find a more efficient model of corporate management.

When I was at IBM research last century, we thought MS research was doing awesome things, but unable to get products out. There appeared to be some fear that MS would start producing stuff from their research. (MS and IBM were competing in the Notes vs Outlook arena)

I hope the New England R&D (NERD) which has been very generous with allowing software groups to use their space to meet continues to do so.

Short sited and a sad day.

When I read about the immense amount of money that has reportedly gone into research at companies like Microsoft, billions of dollars, and seen very little ever come of it, I can't help but think maybe they would have been better of just making it a venture capital fund. I don't think R&D departments have the incentive entrepreneurs have in actually making research useful. Google X stands out as different, and I think that's because Google seems to be using it for marketing as much as research. We've yet to see any game changers come out of there, unless you think Google Glass was a success. The self-driving automobiles are interesting and will probably lead to something, and the air drones too. It's probably not all a wash.

The conspiracy theory I heard is that MS is playing a long game to go private.

Whenever their stock starts to go up; they pump a lot into R&D which makes them less attractive to investors stabilizing or lowering their stock price while not devaluing the company.

I don't know enough about stock manipulating to evaluate these statements, but I found them interesting when first told to me.

The dollar figures for "R&D" are really deceiving. Don't forget the "D" stand for development.

For a company the size of Microsoft, who has 130k employees, it's not unrealistic to imagine 40k employees are developers and/or product management.

At an average fully loaded cost of $150k per developer x 40k developers = $6 Billion.

So all the cost to just maintain their EXISTING product set, in this illustration, might be $6B ... none of which is "research"

Where were some things @ MS research (back then) that stood out as awesome or memorable to you?

They only axed Silicon Valley research. Microsoft Research is still strong, but in Redmond, Israel and other locations. The Microsoft executive team fully recognizes that research is key to their future success.

What success has come from MSR? MSR always seemed like a charity operation.

> (MS and IBM were competing in the Notes vs Outlook arena)

If IBM was worried about Microsoft Outlook competing with Lotus Notes, whatever Microsoft Research was working on was surely not even worth worrying about compared to the fact that IBM's product was Lotus Notes.

It seems that satellite campuses are particularly hard hit with this round. I wonder if there is a desire at the top to move more things back to redmond.

Being optimistic, this will presumably generate loads of new companies.

How else do you think they got the cash to buy Minecraft?

It's a real shock in this day and age of intense competition for talent to let go of such a large number of talented (they must be, to be there in the first place) engineers (or is it scientists) in the heart of silicon valley. To me that's a sign of a company that doesn't see a way to grow new products via creative efforts of it's employees. Oh well, I guess it's good news for the startups who could much better use the that same talent. (Edit - to remove what might have sounded like a recruiting pitch)

Reply on news.ycombinator.com