Comment by Someone1234 | Hacker News Reader

Comment by Someone1234 | Hacker News Reader

I thought Microsoft's stated goal for these layoffs was to reduce the amount of managerial indirection, remember this catchy quote from the layoff announcement:

> fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.

But yet the vast majority of people who have been laid off have been engineers or other "boots on the ground" types. It doesn't really sound like Microsoft is doing anything about their huge internal political debt (that makes them so inflexible and slow moving).

Plus, to me, sacking your research people is never a "good" indicator for a company. That either means that your research was entirely misguided OR that you've just given up on new innovation/first to market.

If I was a long term Microsoft shareholder I'd definitely have mixed feelings right now. On one hand Microsoft has made cost savings, but on the other hand it might be at the cost of their long term growth.

... We'll just have to wait and see how this all turns out...

The extra irony is cutting jobs and research while spending billions to buy a game franchise.

I imagine the short term ROI for Minecraft is much higher.

That isn't to say the SV team isn't doing great work that could eventually be of colossal importance... but if it can't be quantified on a spreadsheet, the bean-counters don't consider it.

I don't see any irony. This tiny layoff (~2% of the workforce) is completely unrelated to a franchise purchase to drive growth in the entertainment division. Microsoft isn't hurting, it's reorganizing.

It makes MSFT look some combination of bad/inept/stupid in Silicon Valley. Its obviously not quantifiable in the MBA fashion, but especially in Silicon Valley MSFT needs as much of a good presence as it can get, I think.

I'm going to go out on a limb here and suggest that Microsoft is already considered bad/inept/stupid pretty universally in Silicon Valley, and that this doesn't change anything.

Of course they have to make this atmosphere, in order to shock young people not to go to MS.

However, there were a few Turing award winners in that lab.

Am I missing something? I don't see an indication that they will be laid off. It really doesn't make any sense to have that kind of staff in Silicon Valley anymore. In reality, it makes no sense to have people in expensive locations like Silicon Valley / SF or NYC at all.

> A Microsoft spokesperson confirmed the Silicon Valley research lab is closing this Friday, and noted that an undisclosed number of those researchers will be offered jobs at other Microsoft Research labs.

That would imply that these are layoffs.

Mojang was bought with money that can't easily be repatriated. Same as Skype, which was purchased with dead money.

If rumors/leaks are true, the Skype investment was going to be rewarded by 3 letter agencies via contracts and who knows what else.

I think 8.5 billion dollars of extra work is very hard to award. I think there are very few people if any people in the U.S. government who could credibly promise to award 8.5 billion dollars of work which Microsoft could bid on.

This is still overseas cash, for which it otherwise doesn't have much use. What's it doing with its spare US cash, which is real money? It's using it to buy back its own shares.

Buying Skype, Nokia and Minecraft is gambling, but what are the odds that one of these will ultimately move the share price more than buying back a few shares?

That game franchise will generate more revenue and employ more people than the purchase price. It'll be a real cash cow.

Microsoft would have to sell 92,592,592 copies of minecraft to break even. So far, 16,730,534 have been sold.

That's just PC sales. In April this year XBox 360 sales reached 12M and PS3 sales were 1.5M.

That aside, the real money is in merchandising and tie-ups

Minecraft also makes more on merchandising sales than software sales.

Half the under-13s in the country have or will have a Minecraft t-shirt, lunchbox and/or action figure. The game revenue is a small part of it. If you have kids you probably know the mindshare this game has. It's bigger than any video game I remember.

It'd be interesting to see Microsoft make Minecraft a free addition to every licensed copy of Windows.

I think you misunderstand how large multinationals work.

They are good at product sales, they are bad at innovation. The layers of bureaucracy required by so many employees makes decision making hard.

The modern model is that companies as large as Microsoft will just buy smaller more innovative companies to leverage that loss of product research.

To be fair its a model that works really well.

Not all research is ground breaking and sometimes you really do have to pivot. Any long term shareholder is probably happy since it cuts cost.

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