Questioning Microsoft Layoffs

I am not a big fan of Microsoft.  I jettisoned their MSN service in early 2001 when they lied to users about a week long break in service.  And when my PC hard drive crashed and burned I didn't take much convincing to beat a path to the Apple store for an iMac.  Having said that, I think it is important to focus on the Microsoft layoffs not because I don't particularly like their products, but because I think how the company is handling the economic woes is indicative of our current reality.

The most interesting headline on the layoffs said that "analysts" are not happy with the number.  In other words, Wall Street wanted more people on the street, not less.  This draconian attitude comes a mere three days after the euphoria of President Obama's inauguration and a general belief among Americans that he can and will do something to get our economy back on track.  So, I wonder, are these Lords of Wall Street reading the same news that I am reading?  How can they demand more layoffs when the economy is already reeling?  And the irony is, Microsoft was making money, just not enough money to satisfy Wall Street.

But here is the deal.  Investors have managed to make a lot of money off of Microsoft.  In fact, a little over 4 years ago, Microsoft not only issued a dividend higher than the Wall Street norm, but they also sent out checks to shareholders to the tune of $3 a share!  Bill Gates hauled in (are you sitting down?) $3 BILLION.  Steve Ballmer, the man to emailed Microsoft employees the details about the layoffs, took home $1.2 billion.  Cash.  Wow.

Now, many of the large individual shareholders still live in the Puget Sound area, headquarters to Microsoft.  Paul Allen, owner of the Seattle Seahawk football team, Portland Trailblazers basketball team, and the world's largest yacht (he has several as well as mansions all over the world), still has significant Microsoft holdings in his portfolio.  And last week, Paul Allen's company, Vulcan, also laid off people.  The interesting conflict, then, is that individual shareholders who stand to gain when Microsoft does what Wall Street analysts want, are laying off their neighbors.  

Steve Ballmer, the CEO of Microsoft, contributed over $50,000 to the Obama inauguration celebration, as well as several other top executives of the company.  Think about it, $50,000 could pay someone's salary for a year!  But the $50,000 will gain him important access as he wheels and deals even more tax credits for the company.

And the institutional investors?  Well, guess what?  One of them is JP Morgan Chase, yep, the same bank that is taking bail-out money.  Another large investor is Goldman Sachs.  Same company that former Secretary of the Treasury Henry Paulson came from.

Last, questions are beginning to surface about the status of laid off employees versus those that stay.  Microsoft, like many high-tech companies, hire significant numbers of foreign engineers who are employed under a special immigration status known as H1-B.  It will be interesting to see, if one is produced, an outline of how many H1-B employees were laid off.  

Bottom line, it seems to me, is the Microsoft layoffs open the door for discussions about corporate ethics, morality of employment, how much profit is enough, investor value, shareholder responsibility to the communities they live.  Of course, we know that those kinds of discussions will not happen, but, wait, can't we hope?  In the meantime, another headline today says Starbucks  is about to also announce layoffs.  Wanna' bet Wall Street is asking for those, too?

Media Closures, Layoffs and Democracy

Today's big news is local.  The Seattle PI, a Hearst owned newspaper, is going to either be sold or shut down.  We'll know more in 60 days.  However, as they say in the media business, sources say the likelihood of sale is nil, therefore the PI as we know it is essentially gone.

The PI is now in line with other venerable media outlets, such as the Detroit Free Press which recently announced it was scaling back it's home delivery of a physical newspaper, and media giants like CNN who laid off almost all of it's environmental reporting staff.   And of course, there were the huge layoffs from National Public Radio.  Just goes to show a huge endowment from Joan Kroc didn't insulate NPR from the economy!

Among media folks, there is a lot of speculation, blaming, and frustration over the demise of newspapers and news media in general.  Much of the finger pointing goes toward the Internet and the so-called democratization of "news."  Blogs such as Huffington Post, Daily Kos, Politico, which are essentially news aggregators, are believed to be the enemy of institutions such as The New York Times and yes, even the Seattle PI.  

Seattle has always thought of itself as a big city, and went through significant teeth-grinding when it thought the PI was going under in the early 1980s.  Backroom deals were hashed out by city fathers (think lots of cigar smoke and cognac at the Rainier Club) to keep both newspapers in business.  It was felt that having two newspapers reflected a sophistication, a sense that Seattle was a cosmopolitan city.  

While I have not been a big fan of either newspaper, and was ecstatic when I realized I could read both of them on-line for free, I do think this epidemic of layoffs, newspaper closures, and scale backs is, well, not a good sign for America or democracy.

Ok, here is my second qualification: I am also not a big fan of what has been termed "mainstream media."  Oh, I read a lot of it, listen to NPR, rarely watch TV news, but I do all of that with a large dose of cynicism.  I have not been a fan for a long time.  I suppose because having been involved in politics and being around reporters who, being frank here, are the best drinking buddies with politicians, the idea there is "objective" mainstream media is a crock.  And the so-called paper wall between income and reporting?  I can give you dozens, if not more, examples where that wall is a figment of someone's imagination.  

But, having said that, I am very concerned about the demise of these institutions.  I don't think  I need to go through the litany of great things much of the mainstream media has done: Pentagon Papers, Watergate, Arms for Hostages, current reporting on the economic melt down....think about this and add to this list yourself.  Quite frankly, Huffington Post  can not even begin to think about providing us those kinds of journalistic bomb-shells.  For whatever mainstream media has gotten wrong (the run-up to the Iraq war for instance) there have been hundreds of events they have gotten right, or close enough to right that we were able to peek into the abyss and see the muck.  

At a time when government is about to go through a huge expansion of it's role as well as it's power, even greater than with President Bush, when corporations are forced to consolidate, when financial chicanery impacts each of us, we need more watchdogs not less.  We need people who are not afraid to ask, probe, make nuisances of themselves, not accept a press release or former colleague who took a high paying job telling them what is up.  We need scientists, economists, psychologists, poets, willing to examine and write about the world around them.  And we need news not just from the glamourous capitals of the world, but from down the street, the next state, or a small town in the Midwest.  

There is a lot of fear right now.  No one knows if they are going to lose their job.  Boeing, the Seattle PI,  Aloca, Washington Mutual, the list goes on of layoffs, reductions, hiring freezes.  Now, more than ever, we need courage, a willingness to write, to report, to explain.  We need fearlessness, an ability to withstand the anger people share in the comment sections (have you ever noticed the vitriolic crap that gets written in the comment sections of these web sites?  Scary).  Most of all we need an understanding that abandoning news, or allowing media to write it's own obituary, is the worst thing for democracy.  Our information then becomes a battle between garbage fed by government, corporations, or some publicist versus someone like Ariana Huffington deciding whether she wants to argue with the press release or not.  It become superficial and all about ego and power.  And no one other than those well connected people participate.  That is not democracy.

So, if the PI goes down, I say we all take up pens and paper, make press credentials, and hit the streets.  It's our duty.