02.23.09

Microsoft is Having Financial Problems

Posted in Finance, Free/Libre Software, Microsoft, Steve Ballmer at 8:11 am by Dr. Roy Schestowitz

Debt and credit

THE TITLE may be a little deceiving because it does not refer directly to Microsoft's financial difficulties*, which are becoming more of a common knowledge. It’s actually about indicators of Microsoft scrambling for cash that it may never receive or recover anyway because other people’s coffers run dry(er).

In the following article from Gamasutra, Steve Ballmer is quoted as saying — although not in these words — that he is concerned about the impact of the meltdown. This follows some of the things he said last year about the company needing the bailout, which he personally lobbied for recently. They are in serious trouble and they are fully aware of it.

The company recently revealed declining profits in the fourth quarter of 2008, and announced a plan to cut 5,000 jobs as a result.

Another money-grabbing reflex from Microsoft is an attack against distributors whom it used to depend on (and maybe still does, especially now). Based on the news, those pursuits generally continue and they involve not only Microsoft software.

A 24-year-old Texas man has been sentenced to 41 months in prison for selling counterfeit software on about 40 Web sites, the U.S. Department of Justice said.

Overall, this works in favour of Free software.

Perhaps the best example of Microsoft’s scramble for cash is this bunch of ludicrous moves:

Microsoft is trying to get severance money back from some employees it laid off last month.

In letters written to an unspecified number of laid off Microsoft workers, the company says that due to an administrative error the company paid them too much severance.

“… An inadvertent administrative error occurred that resulted in an overpayment in severance pay by Microsoft,” the letter states. “We ask that you repay the overpayment and sincerely apologize for any inconvenience to you.”

What was going through Microsoft’s mind? Is it really expecting to see this cash? CNET calls it a “public relations blunder.”

Microsoft says it made an accounting error when it laid off some employees last month and now feels the best way to correct the error is with what will likely add up to a public relations blunder.

The software giant, which recently laid off 1,400 employees, sent letters (see image below) this week to some of those former workers letting them know that their severance payouts were a bit too “generous” and respectfully requested that the former employees pay back that money, according to a report Saturday on TechCrunch.

This is also covered in:

  1. Microsoft wants severance pay back from some fired staff
  2. Oops: Microsoft Asks Some Laid Off Workers To Send Back Part Of Their Severance
  3. Microsoft Asks For a Refund From Laid-Off Workers

Interestingly, while Microsoft implements layoffs that are not sufficient in terms of their scale, the company continues to pursue cheaper labour.

Locally, Microsoft had more than 1,000 H-1B visas approved for 2008, the fifth-highest for any U.S. employer. Others, like the University of Washington, got approval for 104; Seattle Children’s Home for one.

[...]

As unemployment spreads, immigration attorneys believe some big employers may be making fewer H-1B hires this year. Microsoft said last week that, in light of economic conditions, “we are constantly evaluating our appropriate staffing levels.”

Bloomberg has a widely-cited report covering the issue as well.

As many as 5,000 employees are being shown the door at Microsoft, which uses more H1-B guest-worker visas than any other U.S. company. Some employees and politicians say Microsoft should get rid of foreigners first

This is a subject that we previously covered in:

Microsoft’s wealth — or lack thereof* — set aside, people who run (or ran) the company have been stashing cash for quite some time and despite bankruptcies, their problems are few. Owing to the so-called ‘stimulus’, which is a euphemism for “public looting”, people like Paul Allen will gain a lot more personal wealth so that their buying spree (things like huge boats) can carry on.

Billionaire Paul Allen is a Microsoft cofounder, the owner of the NFL’s Seattle Seahawks and the owner of the NBA’s Portland Trailblazers.

[...]

So what will Paul do with that money until 2014? Invest it in technology that reduces our dependence on foreign oil and creates new “green collar” jobs for America, per the goals of Obama’s stimulus plan, of course.

Or Paul maybe can buy a new boat. He already owns two, here is one of them

This article contains a self-explanatory picture. There is a famous battle of egos there between Paul Allen of Larry Ellison (over who has the bigger yacht).

Personal wealth is never to be confused with commercial wealth of the companies owned by those people. A recommended multi-part show which comes to mind is titled “The Century of the Self” (video). It explores some issues that are close to the theme here in Boycott Novell.
____
* The company may already be in debt if not very near to it [1, 2, 3, 4, 5].

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5 Comments

  1. Needs Sunlight said,

    February 23, 2009 at 9:30 am

    Gravatar

    Also, Bills’ father has been operating behind the scenes to clear up all kinds of political obstacles his boy might be encountering, through contacts and methods that come from having grown up with lots of money. Fine.

    Lobbying like that can’t be bought, at any price. Nor can it be replaced, when the *old* crook runs out of steam or time, the college dropout will be one his own. Then the young crook will have to fend for himself even in spite of a whole parade of handlers. PR teams can cover up public images, but they can’t make up for direct contact with Bill.

  2. Anarcapitalista said,

    February 23, 2009 at 11:23 am

    Gravatar

    People looting public funds are embezzlers. There is a law which covers that, except the people who are the watchdogs are the looters. Like the fox guarding the henhouse.

    Finding loopholes in the law to circumvent accountability is an ethical crime. Why arent these people convicted and sent to jail? Has the Rule of Law been replaced by predatory greed, extortion of the common man?

  3. Robert said,

    February 23, 2009 at 4:29 pm

    Gravatar

    Anarcapitalista said,
    [quote] People looting public funds are embezzlers. There is a law which covers that, except the people who are the watchdogs are the looters. Like the fox guarding the henhouse. [/quote]

    yes, this is very true. it has been this way in the American Government since the early 20th Century.

    Anarcapitalista said,
    [quote] Finding loopholes in the law to circumvent accountability is an ethical crime. Why aren’t these people convicted and sent to jail? Has the Rule of Law been replaced by predatory greed, extortion of the common man? [/quote]

    because the original constitutional form of government was overthrown & replaced with globalist (criminals) right under the peoples (sheeples) nose. the ONLY way to restore the Republic is another revolution. until that happens, nothings going to change for the better. we are almost into world government right now.

  4. Myfraudsoft said,

    February 23, 2009 at 10:16 pm

    Gravatar

    Myfraudsoft need needs a bailout? No, this is impossible. You see, it is Myfraudsoft that is rock-solid stable (just like their OS), not Google. Certainly not Google. Google is just a house of cards.

  5. Roy Schestowitz said,

    February 23, 2009 at 11:01 pm

    Gravatar

    2007: Microsoft CEO Says Google A ‘One-Trick Pony’

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