08.09.10
Replacement for Ballmer From the Outside, Microsoft’s Inexpensive Outside Workforce Suppressed by US Congress
Summary: Difficulties that are faced by Microsoft may require replacement of leadership and expense-cutting through offshoring is now impeded by the US Congress, which would cause further difficulties for Microsoft
MICROSOFT’S CEO Steve Ballmer is exceptionally unpopular among the Windows/Microsoft crowd, so Glyn Moody wonders what would happen if they got rid of him.
For example, one future might be more of the same: broadly stable market share on the desktop, where its stranglehold is pretty unbreakable; continuing massive losses online; disappearance in the mobile sector; invisibility in new areas like tablets. But is that kind of no-brainer cruising mode really an option? Surely one implication would be a static or even declining share price, and increasingly angry shareholders? At the very least, Steve Ballmer would be ejected, and fresh management brought in, which brings us to the second option.
Assuming that shareholders decide that drastic action is needed, and a new CEO appointed, who should it be? Someone from within the company, to ensure continuity? Is there anyone with the requisite vision and stature? Top executives seems to be fleeing at an accelerating rate, and it’s not clear who is left that commands respect both within the company and with financial analysts. The latter are critically important because, absent a strong hand on the controls, they would probably write off the company completely, causing its stock to go into a death spin.
Maybe Microsoft needs an experienced outsider with no compunction in slaying the sacred cows of Seattle? And if so, from which industry? Another computing exec (I gather that HP may have one spare…), or from a completely different one? That was IBM’s approach when, in its desperation to save the company from a terminal decline similar to Microsoft’s, it brought in Louis Gerstner from Nabisco, a biscuit company….
Microsoft has already hired a CFO from the paper industry. The circumstances of his departures were mysterious.
What actually happens at the moment is that many US jobs are being sent overseas or workers are brought from overseas (on visas) to replace US workers. It helps Microsoft lower expenses as working conditions exacerbate too. This was made possible by lobbying from Gates and Abramoff.
According to the news in India, Schumer Charles from the US Senate is fed up with Microsoft's extension in India (Infosys).
Criticising companies outsourcing highly-paid American jobs, a US Senator has described Indian IT major Infosys as a “chop shop”, a place where stolen cars are dismantled and parts sold separately.
Wipro is named too (we last mentioned in it one alarming context). In general, the background to all this is the Senate’s decision to tax this practice which is used extensively by Microsoft.[ via]
The Senate measure increases the H-1B visa application fees by $2,000 per application on those firms that have 50% of their employees on this visa.
The fee increase will have the biggest impact on the large Indian offshore firms, such as Infosys Technologies Ltd., Wipro Ltd. and Tata Consultancy Services, which use thousands of H-1B visa holders to service U.S. customers.
Firms such as Microsoft and Google also hire many H-1B visas holders, but they are relatively a smaller fraction of their U.S. workforces.
Notice the naming of TCS there. It’s not clear how this legislation will impede contracting. There is still this old illusion that Microsoft helps the American economy, even though it dodges tax. █
twitter said,
August 9, 2010 at 12:35 pm
Microsoft seems to have deflected the H1B issue from themselves at the expense of their contractor. Microsoft is the biggest H1B employer in the US, constrained only by their share of the number H1Bs that the US will issue. Every year Bill Gates and other softies insult the US workforce by calling US education “inadequate” in order to raise the number of H1Bs that can be issued. It’s so bad that about 33% of their Puget Sound workforce are exploited foreigners. Yet this new bill passes US outrage onto contractors like Infosys that do the dirty work of recruiting and policing the work force. Behold the downside of working with Microsoft, partners are always treated as sacrificial pawns and one night stands. If Infosys tries to pass on the costs to Microsoft, Microsoft will find someone else to do the job.
The H1B program is an injustice and is the opposite of what a good immigration policy should be. H1B workers have little choice but to take whatever deal is offered to them. If they are fired, they have to find a new job in two weeks or be deported. Companies that use them are only interested in getting the job done at slave labor prices, so valuable experience is passed onto foreigners instead of US employees and everyone’s wages are cut. It is a brain drain in reverse. Good immigration policy puts people with valuable skills where they can be productive without undercutting the rights of existing citizens. Everyone is paid what they are worth and the economy grows in ways it should.
We should not be surprised that Microsoft influenced immigration policy is so bad. Microsoft’s business is built on the injustice of non free software, screwing the users for the benefit of the company. A company that screws its customers will also screw investors and employees.
Dr. Roy Schestowitz said,
August 9, 2010 at 12:43 pm
An unfortunate outcome of this is that it’s a self-fulfilling prophecy. By refusing to hire those “inadequate” computer scientists in the United States, Gates et al. depress desire for people to study computer science.
If Microsoft wants inexpensive workforce on a short leash, then it ought to just say so.