Tuesday, February 24, 2009

Microsoft asks laid-off workers for cash back

Read the article, but the worth here are the quite amusing comments.

Althought this one was quite astute:
Markham Mayhem from Markham, Canada writes: Crimson the Red hits the nail on the head. Microsoft's profits dropped from 5.2 Billion (yes that is billion) per quarter to 4.7 billion per quarter. OMG, the sky is falling. Nevermind that they're still on pace to make almost $20 Billion USD profit this year. Profit! Not Revenue. Profit. To lay off 5,000 employees under that condition is pure nonsense and if you think about it, this type of corporate behaviour actually produces a negative feedback into the economy and hastens the decline.It is like a company that foresees an economic downturn, so lays people off. But the very act that they engaged in actually precipitates the economic downturn. I do understand that companies that are barely surviving need to reduce workforce. But MS is hardly in this category. Finally, do the math on this. MS lays off 5000 people. If you figure they make $100k/year, that comes out to a saving of $500MM/year. Compare that to corporate profits of $20B/year. That is 2.5%. In accounting terms, anything less than 5% is considered not material. In this case, the layoffs is not material.


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