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Microsoft's Skype office in London to close [Update: 220 people to be laid off]

Update: ZDNet got a statement from a Microsoft spokesperson about the Skype London office shutdown, and clarified that about 220 workers will be laid off as a consequence of that decision.

Original story: Microsoft plans to close its Skype development offices in London, which will affect nearly 400 of its employees. Skype was founded in London in 2003 and Microsoft opened new offices for those workers in March 2013. Microsoft acquired Skype for $8.5 billion in 2011.

The Financial Times reports that a Microsoft spokesperson has confirmed the closure of the Skye London offices, because of a "decision to unify some engineering positions, potentially putting at risk a number of globally focused Skype and Yammer roles". The Skype London employees are currently in a "consultation process" with Microsoft, and the spokesperson added, "We are deeply committed to doing everything we can to help those impacted through the process".

Microsoft quietly announced earlier this year plans to lay off 2,850 employees by the end of June 2017, and the Financial Times report claims that the 400 Skype London employees will be a part of those numbers.

184 Comments
  • Man, how many employees have they dumped in the past three years now, 20,000?
  • just as much as google and apple and any other companies
  • Um. Untrue.
  • That's a load of baloney. Give me that proof, or don't spew it. Google's only got 57,000 listed employees, are you saying they've more than 25% of their employees in the past few years?
  • Google laid off 10,000 in 2008 (over a third of it's staff, even though they had the highest profit per employee that year), Apple 4,100 (31% of workforce) in 2013. MSFT has 118,000 employees, so laying off 20,000 (17%) is less percentage wise. Proof.
  • And what has that got to do with anything? The obsession here with Apple and Google is getting out of hand. You are bringing up what Google did in 2008 to explain what Microsoft is doing today, 2016. So, are you saying that Apple and Google went through some tough times years ago but are fine now. And, now Microsoft is going down? I am trying to understand the correlation. Why what Google did in 2008 is relevant to what Microsoft is doing now.  The original OP simply asked how many people have been laid off by Microsoft in the past three years. 
  • Dude's merely pointing out that Microsoft is hardly alone when it comes to layoffs. If you don't like the comparison with Apple and Google, I know where IBM has been and still is shedding employees like crazy, yet that doesn't make the news. Or how about the thousands Thompson Reuters routinely bleeds off, largely from their IT empire? My large company just finished reducing IT by about 500, but it went unnoticed because it was done gradually over 4-5 years via natural attrition. The point is every large enterprise has to periodically evaluate how much each department contributes to the current company plan. Employees in departments to be phased out are given a new job in the company or have to apply for one inside or outside the company.
  • "reducing IT by about 500 . . . over 4-5 years" Not even a semi-valid counter to the 20,000+ MS has dumped in probably about half that time.
  • Yeah, and in 2014, Nadella made it known that he intended to cut 18,000 jobs IN A YEAR. Twice the jobs, so about the same amount. And that's just FY2015, ignoring the nearly 3,000 being mentioned as a goal here. Oh, and note that Google's listed at having 57,000 employees now. You say they had 30,000 in 2008. So, they cut 10,000 in 2008, then hired another 37,000 after that. Microsoft's probably coming up on 30,000 layoffs over that time, though mostly through shedding employees they snatched up when they bought things like LinkedIn, Skype, Nokia, Mojang, and Xamarin.
  • Wall Street doesn't seem to mind so much...
  • Why are people surprised when Company A buys Company B and later sheds about the same number of employees that Company B had before the buyout? Rarely does the buying company want more employees. What they really want is the intellectual property and customers. About the only time the employees are left intact is when the buying company wants to operate the other as a nearly self-sufficient subsidiary that provides enough benefit to warrent the overall increase in employees. 
  • Probably More than that
  • When you are one of the largest companies in the world, things like this happen. Most, if not all, fortune 500 companies have had layoffs. It's something that sometimes has to happen for the company to continue to be competitive.
  • It has little to do with being a large company. It has to do with silly things like dumping $7.5 billion into a Nokia acquisition that was a complete and utter waste, resulting in the need to lay off basically all of the employees you absorbed. If Microsoft hadn't spent the last 3 years rebooting WP7 with WP8, then doing it again with W10M, all the while doing almost nothing on the hardware side worth mentioning, they wouldn't have needed to cut so many people. It's because the mobile division has been a disaster. On top of that, their Xbox Entertainment Studio thing was a colossal flop that STILL hasn't produced a Halo TV series we were promised for a 2014 release (does it even still exist?).  They've gutted the developer portfolio and let go of a lot of people through their poorly developed Kinect and game projects, too. They've been making a mess on several fronts of late, that's the problem. It's not because they're big, it's because they keep swinging wildly at things with little sense of direction. I can't recall the article where Apple planned to release 18,000 employees, despite their having 115,000 of their own.
  • You are correct. I wasn't trying to say that bad decisions aren't to blame. I was just stating that the larger your company, generally the larger your risk of layoffs when markets change. A lot of retail companies felt this when Amazon became more than a bookstore for instance. MS is most certainly to blame for this one, they have been shooting themselves in the foot long before they entered the mobile realm.
  • But there was a TV show back in 2014/15. You didn't watch it? It's available on Xbox halo app
  • Microsoft is a software company that needs hardware partners. Nokia dominated, and it was necessary to end that domination for the larger goal. There are now more partners making Win10 Mobile devices than there ever was for WP7 or WP8/8.1.
  • I see all those new hardware partner phones in stores around here all the time ha ha ha.   W10M is a joke,  actually all Windows 10 is a joke.  At least when Nokia Dominated they had actual market share....with all these "great new" partners making windows 10 mobile devices,  They sure don't like selling them.  Sometimes having one awesome one is better than 10 extremely crappy ones.  
  • @Keith Wallace, that is because XES was axed before it even took off....
  • FALSE. Microsoft is slowly dieing. And Satya is a real incompetent.
  • True, just look at the stock rate. More experts then just you.
  • So cutting staff to keep your costs down, having a share price that is double today what is was in 2012, having revnue still at the 22b per quarter mark, and generating more income than 2014/2015 and returning 16% more in dividends to shareholders is a dying (which you can't spell) company? You really need to read/comprehend/think before you start pressing keys on a keyboard Venetasoft - as this really isn't a "dieing" company mate.
  • Lol!!! Way to break it down
  • To hwangeruk: Exactly. I'm a MS shareholder and I've done very well with my MS position especially in the last 3-4 years. The dividends are sweet. Mobile has been a non-factor as it relates to the stock price. It's everything else that MS offers that has driven up shareholder value. Long MS.
  • what goes artifically up must come down....I would sell now barstow.  The ship will be sinking quite soon.
  • Waiting for Apple to crash. What goes up..... (your words, not mine)
  • Dont listen to the armchair stock exchange/broker experts who learnt from watching teletubbies or the Business Analysts learning from playing Pokemon Go.  MS is a very VERY good investment right now.
  • If this is a dying company then my god I hope it keeps on dying because I am doing quite nicely thank you out of demise you predict. Research mate before you type silly comments!
  • Satya is a complete asshat when it comes to mobile, but the company is nowhere *close* to dying.
  • This is bs. "competitive?" with what? how many billions do they need to make a quarter in profits? Competitiveness has to do with whether or not they're able to run the company and make enough to cover losses, pay staff, and produce new products which continue to sell and keep the company going. This skewed view that a company has to keep posted grossly bizarre amounts of profit to funnel back to shareholders is a damaging and dangerous view of how economics works. it's literally the reason for our economic stagnation and the destruction of the middle class. Competitiveness has nothing to do with it.
  • @sweatshopking, that's completely wrong. It is the fiduciary obligation (meaning legally and ethically required above all else and above their own self-interest) that the board direct the management to do what is in the best interest of the shareholders. Because Microsoft pays a dividend, that means every additional dollar in profit is addition money to each of those shareholders. If Nadella settled for that "getting by" approach you described, he should be fired. That also means that he needs to make his stock out-perform the market, which means doing better than Microsoft's competitors. And lest you think that those profits only go to paying Microsoft management, no. The whole point is that the shareholders are the ones who must benefit from the decisions. That means every person who owns some Microsoft stock, including holding it it as part of their 401k or in a mutual fund. Now, reasonable people can debate on whether the focus should be near term profit or sacrifice some near term profitability to plow more money into R&D for greater long-term profits. But there should be no doubt that businesses do good for the world by maximizing profitibility.
  • I'm well aware of how corporation laws work. Business is my post secondary. Their obligation to do what is in the best interest of shareholders doesn't mean what you think it means. it can ​be interpreted that way, but there is nothing suggesting that they're required to cut staff when they can reassign them or put short term profits ahead of long term growth. ​In fact, doing so is almost certainly not in their best interests, nor the best interests of Microsoft.
    ​There is no debate. the massive cuts to R&D and development have had disasterous effects on businesses (see HP) and the economy as a whole. The results are well documented. It only​ benefits shareholders who specifically are in for short term gain​, not people running long term investments in their 401k.
  • @sweatshopking, if you've not had to answer to shareholders, your acedemic background may be steering you wrong. Business learned at school is only tangentially related to the real world drivers. Not so much in economics (where academia has a valid understanding), but for actual business processes, negotiation, sales, and shareholder relations, schools are usually pretty from the mark. That said, I actually agree with much of what you wrote here. It is generally better for the CEO to be looking out for the long-term, rather than the short term. The duration of "long-term" and "short-term" varies by industry, of course. In technology, some believe that a 2-year horizon is long-term. Others would say anything less than 5-years is being short-sighted. However, there is nothing in Microsoft's actions that makes it clear that they are being long- or short-sighted. Perhaps they Nadella has a clear 5-year plan that involves some major realignment, and needs different skills and a smaller team. If so, taking these actions now could well be the right long-term move. One point where I do disagree is with your statement, "It only​ benefits shareholders who specifically are in for short term gain​, not people running long term investments in their 401k.​" That is simply not true. Stockholders value their equity based on the rate of return. That is a compounding effect as the stock increases quarter over quarter and year over year. Good companies are those that are able to consistently deliver growth. If a compnay has a few bad quarters, that's usually a bad sign, and as investors flee, the stock price drops, and all shareholders suffer. Yes, the CEO should be planning for the long-term, but that doesn't alleviate his/her obligation to protect the share price relative to comps in the near term at the same time (for MS, chief comps are Apple and Google, and also Amazon for cloud services). Or, at a minimum, explain that there will be near-term negatives for a restructuring (or "retrenching," as Nadella has in fact said).
  • I've run medium sized businesses on two continents. It isn't that I've not answered to share holders, it's that you have to deal with them in a sensible manner. That means not doing whatever some say because some want cash this second. Of course you need to be cognizant of the share price, but microsofts stock was basically the same pre massive layoffs. People are not feeling it, and as such, firing those employees will likely not have a major impact on the long term share price. Buying Nokia was likely a bad move. It was stupid. There are consequences for that. That's not the same as the situation with skype or much of the other layoffs ongoing. I appreciate the genial conversation.
  • I don't really get what they 'gain' out of the lay off of so many employees.
    I mean, they are seriously a 'rich' company with quite a lot of cash and are overall having profits over profits every year !
    How much will they lose if the employees are kept for other jobs within MSFT? I'm no business guy and this might be a lame question but again what are companies like Apple and MSFT gonna do with truck loads of cash in say another 10 years ? Maybe buy a few more companies and then what ? They'll still have loads of cash right !! What's the point ?!!!
  • What you're saying is "they have money, so they should just fake-hire people to jobs that aren't sensible or needed because they can afford to." You kinda said it yourself with "I'm no business guy." These companies didn't get to where they are by having excess employees just napping at desks. They aren't the government, making up jobs with unions that keep bad employees around, wasting taxpayer dollars. They let these people go because they don't move the company forward. Keeping them doesn't fit a need for MS, and it loses them money. This is a company that basically ate $7 billion to take on Nokia employees, then just dump them out. That's the kind of money they have--eat $7 billion and come out basically unscathed. They didn't get that money by hanging on to needless employees to be nice with their money. How much money would MS lose by keeping on 20,000 employees they didn't need? Just to put it nicely and call them $50,000/year employees (guessing that's an undersell for a MS employee), that's $1 billion, and it doesn't include the benefits those jobs would most certainly include.
  • You make a valid point.
    Makes sense now. :)
  • no he doesn't. None of that makes any sense. Microsoft can put these employees to work fixing their terribly subpar products, or working on new ones. Instead, they fire them to pay shareholders larger dividends. It's stupid, and his right wing bias is incorrect.
  • @sweatshopking, it's not a right-wing bias, it's the ethical thing to do and the law. Also, Microsoft has an excellent track record of providing job placement services and substantial severance packages to all of the people they lay off. They paid out millions for the former Nokia people. They are not just kicking them to the curb. And do you know why Microsoft does that when they have no legal obligation to do so? Because it's good business in the long run. By taking care of people they layoff, they keep morale from falling (at least as much) for those who remain, which increase per-employee productivity. They also make it easier to attract good employees and acquire other companies without having to pay extra to overcome a fear that MS will buy and destroy. Those factors increase Microsoft's ability to return value to their shareholders, which is what every publicly traded business is legally and ethically obligated to do.
  • Microsoft does have legal obligations to provide severance packages. idk what you're smoking. Morale at microsoft sucks, and it's because they're laying off a ton of people and prioritizing short term profits rather than long term sustainability.
  • @sweashopking, what are you basing that assertion on that MS has a legal obligation to provide severance? Was this in the contract as part of the acquistion? If so, I've not seen that reported. I'm happy to be corrected if you have evidence of that. The people I know who work at MS in Redmond are definitely not suffering from poor morale, though I've not spoken with anyone there since this particular announcement. They are generally very excited about what's going on with Microsoft's growth in Cloud Services, take pride in watching the whole tech industry follow them after the introduction of the Surface line, etc. However, if you worked for Microsoft at the Skype unit where half the team is being let go, I'm sure it's not the same.
  • In the cases of the workers in developing countries where laws are slack and employment tenuous they likely didn't. In cases of engineers in developed nations they almost certainly are required. Who would take a position without such an agreement? These are typically pretty indemand skills which most agreements would include.
    ​I'm sure redmond is happy. I don't think the satellite teams are. I know many of the gaming studios are unhappy, and many of the teams working on non-core products aren't confident.
  • Almost nowhere is a severance package required in the United States. They are usually perks reserved for employees who've been with the company more than a couple of years.
  • @jasongw, your experience with severance packages is like mine. I have only seen severance packages offered for more senior positions and executives. I've never known engineers to have them. By law, they're certainly not required. But maybe @sweatshopking just meant "required" by the free market to be competitive from a hiring perspective. To be fair, I have no idea what's the norm among those elite tech companies. Perhaps including severance packages in the employement agreements is necessary to attract even developers when competing between Amazon, Google, Faceboook, Apple, Microsoft, etc. I just don't know.
  • Yeah, I did mean based on competitive hiring. You're right the usa and uk both have terrible worker protection.
  • @sweatshopking wrote "Yeah, I did mean based on competitive hiring. You're right the usa and uk both have terrible worker protection." I would suggest that, on the contrary, the ability for employees and employers to be free to contract for whatever terms they want without government interference leads to higher wages and a higher standing of living over time. Government meddling may sound good and get politicians elected, but in the medium to long run, it just hurts the people in the middle and at the bottom of the economic ladder the most.
  • You can suggest that, but id disagree. The vast majority of living standards improvements are a direct result of government involvement, and there is a huge amount of evidence to support increased involvement. There is always the risk of somebody allowing business to do less for its workers, but that not a justification to undermine workers rights. It's a reason to punish the abusive nation. Unions, minimum wage laws, health care, maternity leave, etc. All have had huge benefits for workers at the cost of business freedom. It is easily worth it. I lived and worked for years in Malawi Africa. I even ran a sweatshop there, hence the name. We had absolute freedom for workers contracts. It was hell. I mean that literally. It was a torturous nightmare for staff, and I pray you never find yourself working in the environment you're advocating.
  • @sweatshopking, I'm familiar with the evidence you're referring to. But if you dig deeper into those laws that are oft-touted as evidence that government helped, in almost all cases it FOLLOWED increases in standard of living in the affected region. So the best, most positive spin on this would be that government accelerated the ongoing improvements reaching a larger percentage of the population. More specifically, historically in places where people were dying working on farms, factories offered a safer alternative. People with the freedom to choose between what we now consider two awful choices made the choice they viewed as superior -- leave the farm for the slightly higher pay and safer conditions in the factories. As more workers moved to factories, the cheap willing labor supply begins to tighten, and competition between factories for labor led to improving conditions. Eventually, people saw the reasonable conditions in the majority of factories and organized to demand better conditions. Often these were achieved by strikes first, only much later by legislation. Note that workers striking is just another facet to free enterprise and capitalism -- choosing not to sell their service (labor) to the buyer (the businesses) in order to negotiate better terms. The same is true for all of the modern benefits -- health care, maternity leave, etc. These exist not because of government, but because creative businesses eager to be able to hire workers have to compete with other hiring companies. Eventually politicians see that such benefits have become common and suggest everyone should get them. They win elections and enact laws, but the ideas and improvements started with businesses leading the way. For modern business structures, this process has been repeated in nearly every currently industrialized country, starting with the industrial revolution in the UK and US, through the rest of Europe, ushering Japan, Taiwan, and South Korea into economic power houses with the highest standard of living in their region. Even in China, where the government does control what's happening, the improving standard of living is really still being driven by the same basic underlying forces, just that there is no option to strike or lobby the government (so this one is more complicated, but I can explain it too if you want). In short, free trade, including free trade between businesses and the people they want to hire, is ultimately the ONLY thing that can improve the standard of living of people. Politicians are eager to take credit for it, but if businesses aren't doing well, they don't have the income to pay for better conditions, higher wages, nicer perks, or anything in taxes for those politicians to redistribute. If government tries to take too much, they will kill the goose that's laying the golden eggs and ultimately paying for everything. You said it was hell when you had absolute freedom. Why? Either you're a sadist, intent on inflicting harm on your people (which I don't think is the case), or unemployment is so high, that conditions were already awful before you opened your factory (otherwise, no one would have agreed to work for you with your awful conditions). If there is no competition for employment, that tends to drive down labor costs (unless government screws it up by setting an irrational minimum wage), and lower labor costs (assuming there isn't excessive violence -- some law and order is needed) attracts international businesses to open facilities there for the cheap labor. As more appear, the cheap labor is used up and competition starts improving the standard of living. Again, this is historically the case everywhere with centuries of supporting evidence. The forces of supply and demand are just as true between business and their employees as between business and customers. And if the price is low (cheap labor) that will increase the quantity demanded (attracting more businesses to open up shops where it's cheap), ultimately driving up the price of labor. I offer stock and ownership in my business to everyone I hire. I partly do that because I want everyone who works on my team to feel and work with the zeal of an owner. But I also do it to attract the best people, because they have options take other jobs.
  • I definitely agree that companies, at least larger ones, would be wise to ensure they offer severence packages to employees as a way to stay competitive. It probably doesn't make sense for ALL positions, of course, but mainly for those that are harder to fill. I have seen them (and received one, once) for an engineer position. Compensation is one of those things, though, where everyone values different things, so I'd say it's not something where there should be laws dictating X, Y, or Z so much as they should be flexible. Maybe one employee would prefer a comfy severence package option (though I have to ask, what kind of employee's first thought when taking a job is leaving it? :P). Maybe another would prefer stock options or a higher regular salary. Maybe yet another would rather only work 4 days a week so he can spend long weekends with family or on other projects. My point is this: compensation shouldn't be something that's locked to a limited list of some bureaucrat's limited point of view. We're all different, and value different things. #Diversitybro :)  
  • Err, I have friends at Microsoft, and morale most definitely does not suck. On the contrary, word on the inside is higher today than it's been in years, because employees are given more freedom to experiment, play and develop innovative ideas that might actually make it to market, and because they're finally able to deliver the work they do in a timely fashion rather than wait years for some **** on a marketing team to decide a new version of Windows is needed to spur sales.
  • I'm no business guy either, but I do see the way MS is run as something of a disaster of late. It's high profile acquisitions, R&D, company restructuring. It just seems the company is losing it direction. It seems to of become a company that spend billions to make a million. I know job cuts and closures may at times happen with restructuring, but sometimes, the best use of resources is to move them elsewhere they're needed. MS buys many "startup" companies which are then absorbed into the great giant. Why couldn't a "team" with experience be used in aiding such or provide job specification skills to that expertise?
  • Bare in mind MS still have 176 Billion in assets, so 7.5 Billion they paid for Nokia whilst still a large investment doesn't "hurt" MS that much. They also got more out of the deal than people realise here, as it was in part a way to avoid paying some coporation  tax, they also acquired 2 Billion in patents (although they bought design patents, they 10 year licenses utility patents - but they say they will convert that to lifetime at the 10 year point). Nokia had the second best patent portfolio, second to Qualcomm, so its has enourmous value to MS. Lastly, Google Motorola had a deal with Nokia for patents, and MS now benefit from that following the acquisition - so Google Motorals cannot sue MS for patent infringement. They will have also gained some talent. All in all, what does not look like a successful MS / Lumia phone market growth deal, it was a very good deal in long term sense on patents and talent. Elop in his "restructuring" memo alludes to the fact MS wants to keep the long term ability for "reinvention". They knew it didn't have the market share impact. But they still got a fair bit of value out of the deal for the long term.  
  • to funnel more cash to cash rich shareholders. you're welcome to look up the damage caused by massive R&D cuts to the long term viability of companies. This is a pure short term shareholder play to make the rich richer at the cost of the long term.
  • Exactly.  Just watch the massive stock sale when the arse comes out of it!  You will see board members,  and 100 or so of Nutellas buddies sell massive amounts of stock a few weeks before the drop!
  • @sweatshopking and @Steve Adams, the people who benefit most by a strong share price are not the uber-wealthy -- they're going to do just fine no matter what. The people who need Microsoft to be responsible and seek to maximize the value of the stock are the millions of peole with Microsoft stock in their retirement plans, the non-profit organizations who hold MS stock, etc. You guys have a very myopic and, frankly, dangerously wrong view of economics.
  • And yet i'm an economics/business major. My views aren't myopic, they're just not your views. maximizing the value of microsofts stock would be for them to make their products actually competitive​ rather that literally years behind​ by hiring enough developers to make them competitive. Instead, they're cutting 10's of thousands of employees and trying to maximize dividends rather than make their company better. Certainly some layoffs are fine, even necessary. That's not what this is. You should check out some economic views from the rest of the world rather than just chicago.
  • @sweatshopking, on that (profit should result from products customers want) I totally agree with you. I also agree that if Microsoft could solve those problems by reassigning those people rather than laying them off, that would be superior. It's clearly better to avoid layoffs if possible -- they hurt morale and that makes it hard to keeep the best people and renders all others less productive. Taking good care of your people is good for morale and that yields the opposite (best people stick around and everyone is likely to be more productive), and therefore higher profits. I can't know for sure what's going on inside Microsoft, but I suspect these people didn't have easily transferrable skills, or Microsoft would have done just that, because it's generally better business to do so. But also note that while I've not seen the specifics reported here, historically, Microsoft pays very good severance and provides placement support to help affected employees find new jobs elsewhere.
  • Yeah man, it's sad to see msft lay off so much of employees. Take the case with Nokia, that should be the huge lay off in the history of msft. They could've at least offered them some solution like to work in their respective countries and stuff since Nokia had a global presence in varied categories. Msft today have plenty of stuffs to take care of... It's not like they're forcing into handful of employees humongous tasks, that is Steve Jobs' tactic. So much things to do, so much employees laid off, and msft in a slow (and steady?) pace. There is potential in whatever msft does, nothing is nonsensical, but you have to be productive and practical to define your future. How long is it going to take to steal and present the ideas of msft by someone else as if it had been done with their own mind?
  • MS 'wrote off' the Nokia aquisition. Accounting 101. It seems that when MS lays off employees or shuts down a department people get very upset but when other companies do it these same people just shrug it off. Before being a WC regular I had no idea of all the hatred toward any one company: Microsoft. The stock is at in all time high and people still have a gripe. If MS's stock price was $10 then OK, I got you but it's NOT. People need to stop thinking like fans and start thinking more about the business aspect. Technology is always changing and evolving and it's more competitive than ever before. Weather you like it or not MS is one of the top leaders in tech- mobile or not. Best regards.
  • You must have been sleeping for the past 30 years, because MS has always had this level of hatred towards it.
  • Stock is NOTHING if the product stinks!  I think you should look at marketing and product development 101.  if a product your selling stinks,  so much that you have to give it away for free....oh wait,  there is an ulterial motive for that one is'nt there.   Data mining for profit.   The stock could be a billion dollars a share,  and if the product is still ****,  then whats the point.  consumers will leave whether it be consumer or enterprise.   They will bail....and your "precious stock"  will drop faster than Taylor swifts panties behind closed doors!
  • @Steve Adams, those must correlate in the long run. That is, if a company keeps making products that no one wants, it will lose sales and market share and its stock price will fall. Cost cutting can delay that for a time by preserving near-term profits, but it's very rare that a business can cost-cut its way to growth. The only cases I know of where cost-cutting has actually led to growth is where companies were so inefficiently managed that cutting people helped them regain a focus, and with that focus, came growth. Stock price changes generally reflect what the market thinks the company's prospects will be over looking out about 6-24 months. Because the market moves as the collective wisdom of all buyers and sellers, it's usually (but not always) correct. Keep in mind in Microsoft's case that it's growing and doing very well on the cloud services side of the business. Whether that means that Microsoft is in the process of jettisoning its less profitable or unprofitable lines (like mobile) or not is uncertain. However, I would suggest that their commitment to UWP, Nadella's purchase of Xamarin, etc. all point to a long-term commitment to mobile and an attempt to leverage their areas of strength in a way that will ultimately allow Microsoft to return to mobile. Clearly near term mobile sales are not the focus today. I think most of this internal churn is still a result of Nadella's taking the helm and changing the company's direction from Ballmer's. I think the harshest valid critism of Nadella is that it's taking him too long to make these changes. A new CEO gets about a year to sort out what he's going to do differently and make those cuts, so the company can then adopt that new direction, focus and move forward. That these issues are still occurring this far in suggest either that he's slow to move the ship or that things did not proceed as he planned. Either explanation should concern shareholders. That said, Microsoft is enormous with many conflicted yet valid business lines and strategies. Integrating those into a new vision may be just about the must complex of business tasks any CEO could undertake.
  • Considering the North Sea Oil Industry in the UK has just laid off anything between 120,000 (last official estimate from last year) to 180,000 staff in the same period it's small fry in comparision. Companies change and projects are dropped or amalgamated (as in this case probably) so skills are no longer needed. It sucks but that's life in the modern world and you rarely, if ever, get a permanent job in IT at least in the UK it's all contract. So the only constant is change, that's the mantra of business for a long. long time.
  • Probably, but so what? It's just a job. There are plenty of other jobs, especially for experienced engineers and programmers.
  • "its just a job". But its not. In the big picture, this is 220 jobs. Jobs are really not as easy to find as you make out. Far from it in fact. Doesn't matter what skill you have or don't have
  • It IS just a job. A job working for others should not define you. If it does, you need to reevaluate your outlook on life. I've been working at one job or another for almost 30 years, and for 20 of those years, in IT fields. Desktop support, web design, systems engineer, Exchange admin, infrastructure manager, etc. There is always another job. It might not be exactly like your old one--in fact, it probably isn't --but that's a good thing. It challenges you to reach beyond what's comfortable and do something different, learn something new. It makes you, in short, a better person. I'm not saying it's always easy, or that every new job will be great. Sometimes we work jobs we hate to pay the bills. But those jobs are always temporary, always a place holder on the way to someplace else. Don't tie yourself to your job. You're more than that. We all are. We have to be.
  • That's not what I was saying (however I understand the confusion). I'm not talking about the job itself, and I agree with what you said, but I'm talking about how its not "a" job, but a total of 220 jobs. That's a lot of people who are going to be looking for the same or similar job in the future. And finding jobs aren't that easy already. But who knows, maybe they might all find a new job fairly easily. Again I do however agree on your point on expanding current, and developing new skills for different jobs, its just not what I meant on my first reply.
  • Very inspirational! I was worried about contract jobs. Thanks from a twenty-sth guy.
  • Either way... too many. Still, this is the first group of people I'm glad to see go. The people working on Skype, particularly management, were far too incompetent to keep around.
  • So many companies have announced layoffs. Consolidations are going on everywhere. Technology has a lot to do with it, too.
  • Hopefully Skype will improve development speed.
  • By laying off _hundreds_ of employees? I don't really think so, lol
  • Brexit!
  • Could be part of the story.
  • They should in fact sell Skype itself.
  • Please provide your well researched and articulated reasoning.
  • Please provide your well researched and articulated reasoning.
  • "Excellent..."
  • or we'll release the hounds. ^^
  • Or the Cracken
  • exactly. everything Nadella touches turns into a mediocre quality product: eg windows 10 Posted via the Windows Central App for Android
  • And what exactly was the state of skype pre-ceo-Nadella??!
  • It does not matter, I see the state of the Skype Preview app. horrible cheap design and performance...usual for MS these days: cheaply made and poor quality
  • It does matter. We could write it off with the acknowledgement that you suffer from a cognitive dissonance. I questioned the stipulations your claim made. Those conditions were true of skype before Nadella.
  • Just make Skype a clone of Imessage so people will shut up Posted via the Windows Central App for Android
  • iWhat ??? iShutUp please.
  • iMan oh iMan
  • One at a time, until there's nothing left.
  • You mean trolls?
  • No i think means acutal windows fans....well former fans like myself leaving because of this **** that is being given to us as windows 10.
  • Microsoft it's a universal corporation. If they want they could be work even on the moon.
  • Apple just did some layoffs too, its normal. Restructure happens all the time especially in large companies.
  • I heard Microsoft planning to invest on agricultural, so we will have some kinda dairy brand like Milkysoft? Oh, they need more people involved, yeah, open source of course..
  • Hahahahahahahahah **** Am laughing my ass out , nice one
  • They opened new office in 2013 and now they are shutting them down. Pretty much what they are doing with th Lumia line. 2013: Invest in low and medium range windows phones and flood the market with them 2015: Lumia line killed off. They need to have a a plan and stick with it in the short-mid term.
  • I think they do have a plan. 3 in 1 devices (mobiles) has been their long term plan. The Nokia purchase has helped them get there, but can't get them over the final hurdle (which is to unify the surface brand), so they got rid of Lumia... Same with skype! We all know that skype is unifying with messaging. That's a new team on that, so the old skype team has no purpose now. It's sad to hear about people losing their jobs. Companies can be ruthless, but don't believe for a second that they are just randomly cutting jobs. It's always due to an overall plan. But sometimes the plan isn't always right...
  • Danbo,  their real plan is to create a complete line of data mining software to they can sell personal data at a profit.  remember,  they are a software company,  Creating data mining software for profit.   giving away w10 for free?  WTF?  Of course there is some other reason other than "being nice" for that one.
  • This happens in the world of business, but it almost always sucks for the employees.
  • I think the big takeaway from this is to stop working for others. Form a group of like minded people, choose a project and then execute it. This will help to decentralise the power which is now residing in the hands of few big companies and educational institutions. Come on people, let us FREE ourselves. This system has to change.
  • MS has a bad habit of swinging wildly from direction to direction, here another classic example.
    They never seem to ride it out or stay the course, constantly chopping and changing creating so much carnage along the way.
    Do they even have a long term strategy as the direction changes daily
    They're like a massive ship in a storm with a broken rudder.
  • Eh? What makes you think they haven't stayed on course? Isn't it possible that they managed to complete their course with skype in 3 years? We know that MS is at the point that they are unifying the skype and messaging features. I think the messaging team is carrying on with this unified application. And although the skype team helped them get there, they've succeeded and completed that task, so MS now have no need for that department so are closing it down. Same with Lumia! MS's end goal was 3-in-1 devices. Windows 7 evolved into windows 8 which has evolved into windows 10. Each step getting them closer to their end goal. They purchased Nokia to help them get through this and create some great ranges of devices. Now they're at the 3-in-1 phase of their goal, so they need to unify the surface brand, so the Nokia purchase has done It's job and is no longer needed (note: Course completed... Not changing course).
  • Or maybe a ship in a storm that has finally fixed it's rudder and is now taking control of it's destiny........... How many people on here and other places have said things like "What the heck has Skype been doing for the last several years" and how have MS allowed Skype to lose its dominant posistion while other platforms have taken to the market", one of the few new things to hit Skype in the last few years has been the new preview, whilst Skype itself mucked about with not having a universal app, apps that couldn't send pictures between themselves (The RT app, couldn't send pictures to any other version), I like Skype, I try to use it, but the last two years have been a fiasco, whilst MS were developing 10 and continuum for phone, tablets and touch, Skype effectivly went back to the desktop and refused to comment on why no UWP, so as far as I can see MS had to send in the troops to kickstart the thing with the preview (I do believe MS developers had a big hand in the preview), so it looks like they have got fed up with what Skype have been doing or not been doing.
  • Sounds feasible, especially if the preview was created by say a US team...
  • LinkedIn has 10 000 employees making unprofitable website. I wonder how many will go when that 30 billion blunder closes.
  • It's a matter of time. Just give the idiots at Microsoft some few months to realise their blunder. Bunch of crazy people - those who decided to spend twenty something billion dollars on a loss making job seekers web site. Nonsense!
    Anyway, the soon to be laid off guys can find time to polish their LinkedIn page now to get other tech companies to notice them. It's a magical job procuring site.
  • Interesting to see what accounting tricks will be applied to avoid write down of that 20+ billion goodwill. LinkedIn brand to be lent to other businesses having no goodwill like Dynamics? Lync brand was killed to boost Skype. Backend move to Azure to inflate cloud 'revenue' likely incoming as well. Lotsa tricks needed if Nadella hopes to keep his job.
  • They are making money hand over fist with business facebook.   All that personal data floating around ripe for the RiPPING OFF!   MS total joke of a company.
  • Capitalism, corporate greed and pleasing the shareholders. Gotta make the rich richer.....
  • As I said from the day I trashed all my MS stuff.  And it does not only go for MS.  but you have the thousands of cubical dwellers (think the matrix movie),  and 100 Corporate billionares "running" them.  That is the corporate world.  Being in Montreal on a wed. morning and seeing the thousands of lemmings in grey suits and "messenger" bags shuffling to their 4x4 grey cubical in their grey office,  to plug into the mainframe to make those 100 people INSANELY RICH!.....NAH!...I like my little shop in the back of my property where I make other peoples dreams come alive through works of art!
  • Bah ha ha Fanboys will downvote anything.   Please by all means,  downvoter,  enjoy your cubial.  just like every other lemming in the farm..
  • But you are part of the system, you pay Tax? FIAT currency? You live off grid? You are a consumer, you consume like most people in the western world.  If you didnt you wouldnt have a business, a website, a mobile phone a Laptop.  Labelling everyone and generalising is dangerous.  Maybe those lemmings work for a charity? or the government that you voted for? dont vote? then leave the country you are in, stop complaining and find something somewhere you can be happy.
  • I highly doubt that those reported 50,000 people per day that go through that one area,  stats from the city of montreal all work for a charity.  BTW...the ceos' of charities rip you off just as bad... I goto my work,  in my shop,  and enjoy every moment.  I work on MY TIME,  MY DOLLAR,  and MY PROFITS.  NO ONE ELSE.   If I dont want to goto work,  or if I have something I need to attend to,  I dont need to send and receive memos to do it,  I don't have to ask my superior...and I sure as hell don't sit at a cubical staring at a windows machine all day,  unless I am designing something on my plasma cam ( look that up)!  I don't make other people rich when I work,  I make myself rich.  
  • mainframe??? man that's dinosaur talk..
  • Dinosaur talk or not, mainframes are still alive and well and being sold.
  • Without capitalism you would not have the ability to comment as your device would not exist.  Which device you using? lets analyse thier CSR policy and envirnmental impact, factory working conditions and then the reason you paid them money. 
  • I see no issue at all here. Without an understanding of their strategy no one can make a real comment. Only guess.
  • Some of the comments here are insane. Are you like 8 years old? I run a company and this happens everywhere.
  • Nadella, the terminator.
  • If Bill Gates doesn't get his arse back soon, we will all be on Thunderbird, OpenOffice and Linux.
  • Sadly Gates is back and running Nadella. MS needs Ballmer and Sinofsky back to clean Gates/Nadella/Myerson mess.
  • It s Satya time, ladies and gentlemen, enjoy his show.
  • If we sum Satya, Myerson and Gallo neurons, maybe we have half a shoe brain.
  • Don't forget Bullcrapmer. He destroyed Microsoft.
  • But Satya is the Master Glitch.
  • Once WhatsApp allows video messaging there will be no point in skype.
  • in my day to day the only time I use Skype is Skype for Business to chat with coworkers through IM.  outside office hours it's just WhatsApp, between messaging, sharing pictures and videos, groups, and free international calling, there is really no use for Skype
  • They simply want all core development to be done on one location so the employees can actually work together. And stop the skype developers from continuing to make all this awful software.
  • They simply want all core development to be done on one location so the employees can actually work together. And stop the skype developers from continuing to make all this awful software.
  • I hope they offer the employees a chance to go to America. I would go.
  • I went and came back in a hurry ;)
  • Satya plz come back home.
  • Satya,  please go back home!
  • ..
  • what the hell?
  • Job hunting in time for Christmas. Good job MS. Next LinkedIn on the chopping block.
  • 28 billion, wtf were they thinking!
  • Again,  none of them contacted me for their cubical cleaning out kit.  I still have lots in stock.   MS employees,  50% discount.  I will throw in a swiffer duster so MS does not take your dna and start cloning you!
  • Microsoft have 400 people in a Skype development office??? Hahaha
  • Look at the feature parity between skype and Imessage. Ridiculous..
  • Nadella strikes again. expect mediocre quality from skype in the future. Posted via the Windows Central App for Android
  • In the future?   Skype has been below mediocre for a long while now....
  • This sucks but in later news im wondering if Microsoft is ever going to change the skype name not that they should but curious if they are trying to unify their names
  • Actually, product names have been unified and folded into Skype. Office Communicator, for one.
  • As a business owner, I can understand the decision, although, as always, its people that suffer and that is a cruel fact of life. It's never as clear cut though. Shareholders / Stakeholders are only interested in profit and dividends. MS has been bleeding money, and as far as those looking for profits care, the bottom line counts. Those affected are mearly numbers, a cost in the expense column. The London office, due to its location, is seriously expensive to run, and again, that's a cost in the expensive column. If this is retrenching, this is always going to happen as consolidation of depts and locations saves a shed load of money, obviously. It is a sad state of affairs, but the world continues to spin, and every day this is going to happen somewhere. Maybe they should dispose of a few that sit on their arses all day, and oversee the car crash that they are ultimately responsible for, but as we all know, that ain't gonna happen.
  • Yep bleeding money is right....to the tune of at least 26 billion for business facebook...could have keep the entire developement teams for windows 10, mobile, nokia and skype for 15 years with that 26 billion waste.... And they would be much better off OS wise then too.  Windows 10/mobile would be better 10 fold that that hack job that it is at present....
  • After hurting Finland's economy now it's time for England, like it needs more economic bad news (Brexit), I'm not sure anymore Microsoft is not doing this on purpose!
  • UK is US property. Just yesterday that was proved once again. https://freelauri.com/
  • Im sure a lot of English folks not gonna like what u say!
  • Not all UK folks are lemmings.
  • Lemmings? What does it mean?
  • Subordinate to US subordinate UK establishment.
  • Of course British people are so proud of who they are...
  • Added the troll to my ignore list, thought id seen the last of his drivel
  • I don't understand what you say sir
  • If MS hadnt purchased Nokia, one of the others would have purely for the IP - the result would have been the same.  As for Brexit hurting the British economy I cant see any evidence, the latest figures show no effect whatsoever on the job market.  The £ dropped and is actually at a value where it needed to be, the FTSE 100 grew, that does I guess as its moslty exports from large business.  The only damaging thing is the current government led by a clueless person, guess the ppl in the USA will be sharing that experience soon :)
  • MS did not purchase Nokia. I do agree that neo-con Killary would be a total disaster. She has shown her capability to destroy foreign countries and will use those skills to destroy US as well. Trump is a bit open question but at least he is not 100% proven disaster.
  • Trust a person who has been bankrupt in the past and has funded the competing canditate in the past? Must one say anymore?  
  • Not trust but can't be worse than 100% disaster.
  • Oh please. Trust has everything to do with it.
  • Well I suppose there are 3rd party candidates to choose from if your that picky.
  • We are committed to... The most widely used buzz-phrase ever.
  • It's a double whammy for London. Not just job losses but the loss of a company they started. That's tough to swallow.
  • Nope, 400 jobs is nothing, more than 400 jobs are lost every day in every country everywhere, many more are created (12,540 jobs were advertised on Jobserve alone in the last 7 days in the UK and they are all technical jobs) - The loss of Skype for London is meaningless, it means more to people in this tiny forum than anyone else including Microsoft.  Microsoft have a bigger problem, Whatsapp eating into thier market share.  The speed of development at Skype has been nothing short of apalling, if these 400 had anything to do with it then I say thats a good move.
  • I know relatively speaking 400 jobs doesn't impact a large city like London, but it does impact the local IT sector as all 400 of them are suddenly competing for remaining jobs and it most certainly impacts those 400 families.  But my point primarily was that because the company was started there it's gotta hurt extra bad, even for those not directly affected.   It's like Nokia offices closing in Finland.  If the company is still locally owned and controlled that's one thing, but if it happens after a foreign entity takes control then it's a slap in the face.  It's like saying, "Hey, thanks for your tech.  We'll just take it and make money with it over here in a different country and you guys can go screw yourselves.".
  • Not sure if Skype ever had any history with London.
  • 400 extra candidates makes no real difference to the IT sector in  London (I own an IT recruitment company, Nokia used to be a client of mine) as for families not really.  Anyone employed By MS can find a job in a heartbeat, they will be in a position to choose between at least 20 jobs each, they will also have 3 or 6 months to choose and most likely get better pay.  In todays world it makes no difference to where a company was started.  Finland was hit hard only because of the sheer number of employees at Nokia, what has happened since? an amazing number of startups in Finland, the shackles of talented individuals was removed and innovation rose.  Think id better get on the phone to MS and get the CV's of these candidates :P  Oh and demand far far farrrrr outweighs supply in this sector, no ones going to be unemployed.
  • While true that competent folks will find work it's not that painless always. For example when MS bought NDS quite a many people moved to Redmond with their families only to be retrenched and work visa's cancelled some time later. Sure they knew the risks but still not easy situation to be.
  • Instead lay off the employee, please dont acquired any companies and don't do any experiment with the employees. You may have bl Layoff the Nokia employees. Now its skype employee and then may be later linked in employee. You may have the billion's in your pocket, but not the every employees.
  • Oh no worries there,  business facebook's employees ARE NEXT.   Actually a bunch of them are already gone...All MS wants in the personal data there!
  • This move should have happened 8 months ago when Skype sucked. Or even 3 years ago when Skype could not integrate into Windows Phone 8. Now that Skype is doing good, on the right track, fire them? I hope that means they got more people involved with Skype and they don't make Skype stink again in spite. Posted via the Windows Central App for Android
  • This seems like a weird time to be firing people, now that Skype is taking on a more prominent role in the Windows ecosystem. I thought they were gearing up to take on iMessage with the texting integration and going full steam with the Messaging-as-a-Platform strategy with their chatbot thing. Maybe they're trying to consolidate the teams in one or two locations, and the people in London didn't want to move? Idk.
  • Bots will replace employees.
  • skype wasn't doing great to be honest
  • My company actually provide services to the Skype office so in some ways will be directly affected, but within 500 metres of this building in Holborn there are several new massive buildings coming on stream soon, we are so busy we wouldn't even notice the lose of just a couple of hundred people who will all find jobs within weeks if they are vagualy employable, yes it's a shame when people lose jobs, but as already mentioned, as far as I could see Skype spent all it's time making new Emojies instead of doing a UWP, making Skype users on tablets use the desktop version, and the new preview app was mainly developed by MS not Skype, in the scheme of things this isn't really news, it would be the same as twenty people being made redundant in our company, yet in the year since we laid off 90 people, we have probably recruited the same number but in different posistions, things move on, and companies that don't change and adapt tend to die.
  • I have thoughts, but I'll just state that when a company starts cutting services, then people, it makes you wonder where that company is going to be in 10 years or more.
  • Good news. If they are responsible for the Skype integration and support on Windows ecosystem, they should've been fired years ago. And BTW, there is huge Skype development team in Microsoft's Prague offices.
  • Don't worry, Prague will follow soon. You think Nadella will stop here? Posted via the Windows Central App for Android
  • Well, when I see the results of their work, I think they deserve it.
  • London Skype is falling down, falling down, falling down
    London Skype is falling down my dear Nadell' Skypexit!
  • ok so i was commenting on the damaged core article about how it takes you to another site and looked again and see were you put shared from vr in the picture but come on thats really shady. when i glanced at the pic for the article; and that text you "subtlety"  but in there looks like it it is part of the image. So basically it was clickbait for another site. we should assume we are not being redirected to another website by clicking on an article on your page.  
  • No wonder Windows Mobile is still a glorified beta test 4 years on with all these layoffs. And skype is unusable on rt without an ms account...... So many strange decisions impacting quality in the long run..... Don't they see?
  • From the comments posted above MS does not care....all they care about is stock prices.  They should be a comodities company not a software company.   They are already shifting to a data mining company.
  • Just noticed the headline has change to 220 laid off.  The others are staying on for a couple of weeks to clean up.  Then they are canned as well  
  • Everything MS touches turns into shirt these days...