A sad day for Microsoft — layoffs. The inevitable result of “panic spending”

While I no longer work for Microsoft, after 20 years there I have a ton of friends who are still there.  Microsoft is a company that cares a lot about it’s employees.  The fact that they have just announced layoffs (Mary Jo Foley Todd Bishop Kara Swisher)is a huge step.  I know that the leadership of Microsoft would have rathered done anything else before having to take this step — they know that it will change the company forever.  It really hits home just how serious this recession is.

If only everyone could go back in time just one or two years, people could notice that the frantic hiring that was happenning was too much.  Frankly it was a decision that was not employee friendly because it added the risk that if things turned down, then layoffs would be necessary.  Obviously laying off an employee in an environment where getting another job is next to impossible is way worse than letting them find another job in the boom time.  Nobody was thinking that — but that was the implied risk that was taken.  It wasn’t employee friendly — but it also wasn’t on purpose.

I hope managers at all levels learn a lesson through this process that they take into the next boom time.  Keeping expenses in line, focusing on doing more with less, driving employee productivity and efficiency are all things that are equally important in lean times as they are in boom times.  Some groups do a great job at that (e.g. SteveSi) — others fall into the trap of what I call “panic spending.”  When their team’s products are struggling in the marketplace, it’s so easy to say that we aren’t investing enough.  Then starts the panic spending on things like:  hiring, new offices, travel, non-ROI positive marketing, expensive vendor contracts, etc.  A better answer is to focus on keeping team sizes small, but increasing focus, clarifying goals, and decreasing bureacracy.

We can all hope that this is the last round of cuts Microsoft has to make for a long time, and that everyone can act with moderation in the next boom time.