Microsoft Just Laid Off Thousands of Employees With a Hilariously Bad Memo

Stephen Elop, lead-burier.
Stephen Elop, lead-burier. Photo: Josh Edelson/AFP/Getty Images

Typically, when you're a top executive at a major corporation that is laying off more than 10 percent of your workforce, you say a few things to the newly jobless. Like "sorry." Or "thank you for your many years of service." Or even "we hate doing this, but it's necessary to help the company survive."

What you don't do is bury the news of the layoffs in the 11th paragraph of a long, rambling corporate strategy memo.

And yet, this was Microsoft honcho Stephen Elop's preferred method for announcing to his employees today that 12,500 of them were being laid off. (18,000 are being laid off companywide; Elop, the former head of Nokia, oversees the company's devices unit, which was hardest hit by the layoffs.)

How bad was Elop's job-axing memo? Really, really bad. It's so bad that I can't even really convey its badness. I just have to show you.

Here's how it starts:

Hello there,

Hello there? Hello there? Out of all the possible "you're losing your job" greetings, you chose the one that sounds like the start to a bad OKCupid message? "Hello there" isn't how you announce layoffs; it's what you say right before you ask, "What's a girl like you doing on a site like this? ;)" It's the fedora of greetings.

Anyway, carry on. Let's hear the bad news:

Microsoft�s strategy is focused on productivity and our desire to help people �do more.� As the Microsoft Devices Group, our role is to light up this strategy for people. We are the team creating the hardware that showcases the finest of Microsoft�s digital work and digital life experiences, and we will be the confluence of the best of Microsoft�s applications, operating systems and cloud services.

Wait, what does this have to do with layoffs?

To align with Microsoft�s strategy, we plan to focus our efforts. Given the wide range of device experiences, we must concentrate on the areas where we can add the most value. The roots of this company and our future are in productivity and helping people get things done. Our fundamental focus � for phones, Surface, for meetings with devices like PPI, Xbox hardware and new areas of innovation -- is to build on that strength. While our direction in the majority of our teams is largely unchanging, we have had an opportunity to plan carefully about the alignment of phones within Microsoft as the transferring Nokia team continues with its integration process.

Oh, I get it. This is the warm-up. You're giving me a few minutes to sit down, compose myself, grab the Kleenex. Now you're going to drop the hammer.

It is particularly important to recognize that the role of phones within Microsoft is different than it was within Nokia. Whereas the hardware business of phones within Nokia was an end unto itself, within Microsoft all our devices are intended to embody the finest of Microsoft�s digital work and digital life experiences, while accruing value to Microsoft�s overall strategy. Our device strategy must reflect Microsoft�s strategy and must be accomplished within an appropriate financial envelope. Therefore, we plan to make some changes.

"Financial envelope"? You don't literally keep all of Microsoft's cash in a big envelope, do you? Anyway, "changes." I know what that's supposed to mean. Now, please, give it to me straight: tell me I'm fired.

We will be particularly focused on making the market for Windows Phone. In the near term, we plan to drive Windows Phone volume by targeting the more affordable smartphone segments, which are the fastest growing segments of the market, with Lumia. In addition to the portfolio already planned, we plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices. We expect to make this shift immediately while continuing to sell and support existing Nokia X products.

To win in the higher price segments, we will focus on delivering great breakthrough products in alignment with major milestones ahead from both the Windows team and the Applications and Services Group. We will ensure that the very best experiences and scenarios from across the company will be showcased on our products. We plan to take advantage of innovation from the Windows team, like Universal Windows Apps, to continue to enrich the Windows application ecosystem. And in the very lowest price ranges, we plan to run our first phones business for maximum efficiency with a smaller team.

WTF. Is this some kind of joke? DO I HAVE A JOB OR NOT?

We expect these changes to have an impact to our team structure. With our focus, we plan to consolidate the former Smart Devices and Mobile Phones business units into one phone business unit that is responsible for all of our phone efforts. Under the plan, the phone business unit will be led by Jo Harlow with key members from both the Smart Devices and Mobile Phones teams in the management team. This team will be responsible for the success of our Lumia products, the transition of select future Nokia X products to Lumia and for the ongoing operation of the first phone business.


As part of the effort, we plan to select the appropriate business model approach for our sales markets while continuing to offer our products in all markets with a strong focus on maintaining business continuity. We will determine each market approach based on local market dynamics, our ability to profitably deliver local variants, current Lumia momentum and the strategic importance of the market to Microsoft. This will all be balanced with our overall capability to invest.

Our phone engineering efforts are expected to be concentrated in Salo, Finland (for future, high-end Lumia products) and Tampere, Finland (for more affordable devices). We plan to develop the supporting technologies in both locations. We plan to ramp down engineering work in Oulu. While we plan to reduce the engineering in Beijing and San Diego, both sites will continue to have supporting roles, including affordable devices in Beijing and supporting specific US requirements in San Diego. Espoo and Lund are planned to continue to be focused on application software development.

Blah blah blah I don't even care anymore. You have numbed me to the afflictions of mankind with phrases like "business continuity" and "market dynamics." And now you're probably going to use some crazy euphemism, like "streamline," to tell me I'm fired. Go ahead.

We plan to right-size our manufacturing operations to align to the new strategy and take advantage of integration opportunities. We expect to focus phone production mainly in Hanoi, with some production to continue in Beijing and Dongguan. We plan to shift other Microsoft manufacturing and repair operations to Manaus and Reynosa respectively, and start a phased exit from Komaron, Hungary.

"Right-size"! "Phased exit"! Oh, you are so killing this. You get an extra snack ration at CEO summer camp.

In short, we will focus on driving Lumia volume in the areas where we are already successful today in order to make the market for Windows Phone. With more speed, we will build on our success in the affordable smartphone space with new products offering more differentiation. We�ll focus on acquiring new customers in the markets where Microsoft�s services and products are most concentrated. And, we�ll continue building momentum around applications.

Life is empty. All that remains is dust.

We plan that this would result in an estimated reduction of 12,500 factory direct and professional employees over the next year. These decisions are difficult for the team, and we plan to support departing team members� with severance benefits.

There it is, finally. In paragraph 11. I would react more strongly to the news that I'm laid off, but my synapses are no longer firing properly. The badness of this email has rewired my brain's circuitry. All I understand now is business-school jargon. And death. Sweet death.

More broadly across the Devices team, we will continue our efforts to bring iconic tablets to market in ways that complement our OEM partners, power the next generation of meetings & collaboration devices and thoughtfully expand Windows with new interaction models. With a set of changes already implemented earlier this year in these teams, this means there will be limited change for the Surface, Xbox hardware, PPI/meetings or next generation teams.

We recognize these planned changes are broad and have very difficult implications for many of our team members. We will work to provide as much clarity and information as possible. Today and over the coming weeks leaders across the organization will hold town halls, host information sharing sessions and provide more details on the intranet.

Oh, good. Because if it's one thing I need right now, it's more details.

The team transferring from Nokia and the teams that have been part of Microsoft have each experienced a number of remarkable changes these last few years. We operate in a competitive industry that moves rapidly, and change is necessary. As difficult as some of our changes are today, this direction deliberately aligns our work with the cross company efforts that Satya has described in his recent emails. Collectively, the clarity, focus and alignment across the company, and the opportunity to deliver the results of that work into the hands of people, will allow us to increase our success in the future.


"Regards?" Really? We started at OKCupid stalker, and you're ending at "over-eager candidate for summer internship?" Well, okay. Sure. Whatever. Not like it matters.



MS to Judge: And You're Ugly, Too by Declan McCullagh

2:00 a.m. Nov. 28, 2000 PST

WASHINGTON -- It's been three years since U.S. District Judge Thomas Penfield Jackson first dubbed Microsoft a recidivist offender. The world's fattest antitrust target finally had its chance to hit back.

In a 150-page brief sent to an appeals court on Monday, Microsoft lashed out at the plump, white-haired jurist, accusing him of being a stranger to logic, ignorant of technology, a media blabbermouth and preternaturally biased toward the Justice Department's point of view.

In other words, this time it's personal.

A sample: "The district court's conduct of the trial was highly unusual and prejudicial to Microsoft. Time and again, the district court changed the rules of the game -- and always to Microsoft's detriment."

Redmond's lawyers aren't kidding. Of the six subject headings devoted to Microsoft's arguments in its brief to the DC Circuit Court of Appeals, two of them are devoted to Jackson-trashing.

In Microsoft lawyerese, they are, respectively: "The District Court Committed Reversible Error in Its Handling of the Case" and "The District Judge's Public Comments Concerning the Merits of the Case Require That the Judgment Be Vacated and the Case Reassigned to Another Judge."

Jackson sided with the U.S. Justice Department and state attorneys general in two related cases in June. He changed not a solitary word of the government's requested order before signing it -- and ruling that Microsoft should be carved up into two competing firms.

But the animus between Jackson and Microsoft had begun years before, in a related case filed in October 1997. The Justice Department had accused the software firm of willfully violating a court order related to earlier versions of Windows.

Two months later, Jackson kicked off what would become a lengthy string of pro-DOJ rulings. He agreed with the government and said that Microsoft should simply yank Internet Explorer from Windows.

That was a mistake. Microsoft responded with a sworn statement saying such a move would render the operating system "completely inoperable" -- and Jackson ended up looking like nothing as much as a techno-illiterate.

It got worse. Microsoft filed an emergency appeal of Jackson's order, and in June 1998 successfully got a three-judge panel of the DC Circuit to reverse the preliminary injunction.

Jackson later told reporters that he was "wounded" by the appeals court ruling -- keep in mind, this is the same court that's now considering the case again -- and called it "wrong-headed on several counts."

Small wonder, then, that when the trial began in October 1998, Jackson was not likely to be a fan of Microsoft.

Microsoft's appeals brief complains that "in discussions with The New York Times, the district judge reportedly analogized Microsoft's executives to 'drug traffickers' caught on telephone wiretaps.... The district judge here deliberately chose to discuss the merits of the case in public, expressing strong personal views about Microsoft and its executives in person, in print and on the radio, both during and after trial."


Immediately after Jackson's breakup order became public, news organizations including the Times, The Wall Street Journal and The Washington Post published embargoed interviews they had conducted with the judge earlier in the process. During a subsequent speaking tour, Jackson complained of Microsoft's "intransigence."

The Code of Conduct for federal judges says they "should abstain from public comment about a pending or impending proceeding in any court" and that a "judge shall disqualify himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned."

That's why Microsoft has asked that even if the appeals court is inclined to side with the government, it first remand the case for a new trial with a different judge.

But is Microsoft merely playing to the media, or does Bill Gates' team of lawyers really have a fighting chance of arguing that Jackson was biased?

"Microsoft probably does stand a reasonable chance in persuading the court of appeals that Judge Jackson went too far," says William Kovacic, a professor of law at George Washington University.

"I do not believe that the court of appeals will grant a new trial on the ground that Judge Jackson showed inappropriate bias and mishandled the case. I do think Microsoft might succeed in more limited ways in using Judge Jackson's actions to diminish the scope of the government's victory."

Kovacic, who has followed the case closely, predicts a near-zero chance of a breakup after the appeals courts weigh in.

"I expect the appellate courts to either remand the remedy element of the case for reconsideration or to simply abandon the divestiture requirement and impose conduct controls in its place," Kovacic says.

"Judge Jackson took short-cuts in the remedy phase that violate every notion of 'best practices' that could be distilled from earlier antitrust cases in which divestiture was imposed to cure illegal monopolization."

This isn't the first time Jackson has been criticized for telling the world how strong he thought the government's case was.

In a 1991 prosecution of former DC mayor-for-life Marion Barry, Jackson told a gathering at Harvard Law School that he had never seen a stronger government case and was upset the some jurors would not vote to convict.

A majority of the appeals court decided not to reprimand Jackson, but a sharply worded dissent said: "It is worth noting that the district court judge could have recused himself in this case.... The recusal option was a compelling one."

Microsoft also argues that Jackson did not provide the company with sufficient time to prepare its case, that he permitted the government to expand its case dramatically while it was partway through and that he allowed hearsay evidence into the trial record.

The government's response brief is due Jan. 12, 2001, with oral arguments in court scheduled for February 2001.