Linked by Thom Holwerda on Thu 22nd Jan 2009 15:37 UTC
Microsoft After much, much, much speculation, Microsoft let the cat out of the bag today: due to weak results, Microsoft is going to cut 5000 jobs. Those 5000 jobs will disappear over the course of 18 months, with 1400 jobs being cut immediately. Quarterly results, as well as the cost-cutting measures, were made known in a press release today.
Permalink for comment 345522
To read all comments associated with this story, please click here.
RE[3]: It is a shame
by JonathanBThompson on Mon 26th Jan 2009 13:10 UTC in reply to "RE[2]: It is a shame"
Member since:

You've not ever been involved in the realities of any business, period, when it comes to the realities of running it, and you've also got no knowledge of what software engineers are paid, either on average or in localities.

1. Average starting salaries for noob engineers is > than the $50k within the US, for just the stated salaries: remember this important point for later. If you load up on Indian workers in India, I suspect you can pay less.

2. Curiously enough, most large software firms that develop broad market software tend to be located in areas with higher living costs: the Seattle area is definitely one of them, I know from living there for 4 years after moving from Indianapolis, which has neither large successful software companies, nor a high cost of living (it is actually below average by quite a bit).

3. At least in the US, employers are legally required to pay for unemployment insurance, which is not reflected in paychecks. In some states, they're also required to provide medical insurance, though most states that's not true. However, unless they paid all people as independent contractors and paid them very well, they couldn't compete with other employers to find workers, because their name isn't enough to guarantee much. Many countries have higher requirements than the US. You should lookup the cost of a medical insurance policy from Aetna, Blue Cross & Blue Shield, and other big ones, first for single employees without partners or kids, and then price with them. I think you'd be shocked how much employers pay for decent insurance! I've had to use COBRA several times, so I'm very aware.

4. In the US, employers aren't legally required to provide any retirement benefits, though some countries might: this also isn't counted in the standard stated salary as part of what you were referring to. From the point of wanting to attract and retain workers, they can't afford not to offer them. This also costs money, often a meaningful additional amount.

5. It is increasingly common for companies to grant stock options, which also cost money, to attract and retain workers.

6. Very few companies have no marketing costs. 'nuff said.

7. Regardless of whether buildings are leased or owned, they can't quickly unload them when things get tight, and buildings and their utilities and care cost real money, and for the same amount of space, tend to cost more than residential space.

8. Companies need to pay local and federal taxes, and a lot of localities charge enough taxes to businesses that makes their budgets work, though if companies can, they negotiate breaks, often attached to guarantees of employing a certain number of local workers for some period of time at some average wage.

9. If there's a single company that only ever employs noobs, it'd be an interesting business study, with all employees being forced to leave or choosing to leave after a year or two of experience. In practice, there's almost always more expensive and more experienced developers employed alongside younger ones, along with project managers.

10. Overall inflation in the US has averaged at least 3% for several decades, and often much worse in other parts of the world. At that rate, $50K 20 years from now is likely to be below minimum wage in Washington state, as it is already >$16k for a full-time hourly wage now. It doesn't pay to make such budgets that far in the future:)

(Hey, it goes all the way up to 11!)

11. No large software company is only software developers/engineers, and many of the other employees are more expensive, and very few are less expensive.

I'm willing to bet I left out expense items in this list :p Like... retraining/educational reimbursement...

Reply Parent Score: 2