Microsoft plans to lay off 18,000 workers

[Sigma_Orionis]

Ah, what would you know. You've only been in the business for most of your life you Spanish reject!

Yeah, what would I know, you cravat loving, goulash eating ape!

[SciFiFisher]

Cutting employees is always seen as a way to increase value and save money. That's because personnel costs are usually about 30% of your overhead no matter what your business model is. The loss of productivity to the company is usually justified by claiming that the remaining employees will be more productive and that the company had areas where productivity was not equal to the overhead costs. It's usually a harbinger of a death spiral in which the company closes it's doors or merges with someone else.

A huge company like Microsoft won't go out of business because it can afford to lose a billion here or there while it is correcting course. IBM is an example of a company that never saw the truck coming until it was practically road kill on the business freeway. It managed to re-invent itself and survive. Nokia OTOH is an example of a company that was not large enough to survive being corporate road kill. Microsoft scraped it off the road and decided to see if they could use it's assets and phones as an inexpensive way to get on the mobile wave.

And that leads to the reason why we seem to have a schizophrenic economic and free market environment. We actually introduced a third party to the free market when we created share holders. And then we created a system that rewards share holders over and above the company or the employees itself. And just for gits and shiggles this system rewards short term thinking and planning over long term planning. Yes, the stock market. Which daily seems to run independently of and in spite of a sputtering economy.

[Sigma_Orionis]

Sounds about right to me.

Re: Shareholders, Stock Market et al: It sucks, but I can't think of anything better.

And my sympathies for Upper Management are still below Absolute Zero. Why?

A) According to them. I'm little better than the teenager that mows their lawn

B) Grunts like me pay for their fuckups.

[SciFiFisher]

Sounds about right to me.

Re: Shareholders, Stock Market et al: It sucks, but I can't think of anything better.

And my sympathies for Upper Management are still below Absolute Zero. Why?

A) According to them. I'm little better than the teenager that mows their lawn

B) Grunts like me pay for their fuckups.

Never have sympathy for management or shareholders. They entered into this donnybrook with their eyes wide open. Well, the share holders may be getting duped occasionally but if they do their homework then it is caveat emptor.

The system works for what it was intended to do. The stock market is a way to finance companies by borrowing money from stock holders. Because stock holders are willing to take risks that bankers won't.

[FZR1KG]

Sounds about right to me.

Re: Shareholders, Stock Market et al: It sucks, but I can't think of anything better.

And my sympathies for Upper Management are still below Absolute Zero. Why?

A) According to them. I'm little better than the teenager that mows their lawn

B) Grunts like me pay for their fuckups.

Never have sympathy for management or shareholders. They entered into this donnybrook with their eyes wide open. Well, the share holders may be getting duped occasionally but if they do their homework then it is caveat emptor.

The system works for what it was intended to do. The stock market is a way to finance companies by borrowing money from stock holders. Because stock holders are willing to take risks that bankers won't.

That was once the case.
Now it's more a case of the shareholders want constantly growing returns which is not sustainable.

[SciFiFisher]

Now it's more a case of the shareholders want constantly growing returns which is not sustainable.

That's because they have forgotten that increased rewards are usually tied to increased risk. Shareholders are trying to demand that they get increased rewards out of proportion to the amount of actual risk they are taking. Double digit returns used to (and probably still do) mean that occassionally you get to watch your investment lose half it's value overnight. Or in some cases the stock becomes totally devalued because the company tanks and declares bankruptcy. And in a bankruptcy the stock holders come in dead last.

[Sigma_Orionis]

But..... But..... But.... they're the job creators! if you don't make them happy they don't create jobs!

[SciFiFisher]

But..... But..... But.... they're the job creators! if you don't make them happy they don't create jobs!

You are confusing stock holders with corporations. Corporations are the job creators. Using money they steal... er I mean borrow from stock holders and bankers.

[Sigma_Orionis]

Wait! I thought those were people..... Your Evil Imperialist Capitalist System is too complicated

[FZR1KG]

Here all the doomsdayers were thinking, rise of the machines, rise of AI when the reality is, it's raise of the corporations, our most values citizens!

[squ1d]

That's a new one, the usual excuse is "increasing value for the shareholders"

Too right.

Also, 18,000 is nothing.

[squ1d]

But..... But..... But.... they're the job creators! if you don't make them happy they don't create jobs!

You are confusing stock holders with corporations. Corporations are the job creators. Using money they steal... er I mean borrow from stock holders and bankers.

The Milton Friedman-esque philosophy permeating executive culture is that the share holders are everything and everyone and all that matters.