UBIsoft in potential financial trouble
- Thread starter Silent_Buddha
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Silent_Buddha
Legend
Most of the laid off staff at MS are recruiters although the layoffs have also impacted other areas. For example, with the Military reducing HoloLens acquisition and funding until version 2.0 of the military version of the headset that addresses issues (such as potential nausea) raised by soldiers during testing, MS has laid off some of the engineers associated with that project.
I would imagine that much of the layoffs at Bethesda would be staff that were unnecessary due to redundancies with MS staffing but were kept on because of Covid and spiking demand for technology during that period. For example, recruiters, sales, etc.
People tend to look at layoffs in an overly simplistic sense. For example Amazon just laid off a ton of people, but then they also just went on a huge hiring spree. Evil Amazon right? Well, the layoffs and hiring were in different areas of the company that were completely unrelated to each other. The layoffs were in recruiting, tech., sales, and other managerial positions while the hiring spree was for warehouse positions.
So, the fact that MS is in the process of acquiring ABK is 100% unrelated to the people they are currently laying off. IE - they would be laid off regardless of whether MS were acquiring or not acquiring ABK.
Something else to keep in mind. Back in the day when it was significantly harder for employees to move between companies, companies were far less likely to lay off anyone in the company. Reason being? It was hard to replace those people as you couldn't just recruit people away from another company. So it was in the company's vested interetst to keep on employees even if they didn't necessarily need them. Now, with it being easy for employees to move from company to company it's also easy for companies to hire whenever they need more staff and also to release staff when they need less staff ... especially if you're a larger corporation that offers better pay and benefits which makes it easy to restaff whenever you need to because people want to work there regardless of the potential risk of being laid off in the future since it represents an opportunity to move up financially compared to where they are currently working.
Regards,
SB
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2019: ~144,000 Microsoft employees
2020: ~163,000 Microsoft employees
2021: ~181,000 Microsoft employees
2022: ~221,000 Microsoft employees
Yea they hired a lot of people over the pandemic. Teams was booming like crazy also during that time. However now teams growth is super slow because its reached pretty much saturation. It also really doesn't need a huge dev team behind it because its mostly feature complete. They aren't remaking teams every year.
Also during the pandemic they shut down all microsoft stores except for flagships in Seatle , NYC and London. Those people were assigned to DSS (direct sales and support) and they attempted to reskill them. From what I understand they offered two rounds of buyouts where people could resign and get severance and now this time they closed down half of the hubs they created to support the old store staff. It makes sense as they were all moved into sales which are slowing down with the down turn in the economy. Anyone from the stores is getting paid till the end of the quarter and has their insurance until then and then they get severance 1 week for every 6 months they worked for the company.
What's more is that MS will lay off some of activison's staff once they are purchased. Likely a year or so after everything is done. That is because you don't need hundreds of HR employees spread across all these companies , you don't need marketing spread across all these companies. So some will be intergrated into existing MS divisions that deal with HR and marketing while a lot will get packages
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Deleted member 11852
Guest
Even if Microsoft's HQ team were not micro-reviewing individual roles in their Zenimax acquisitions, Bethesda's management team would have known there was no need for sales and recruiters from the point of acquisition.
Are you suggesting, that the management of Bethesda Games Studio just pretended those people were still needed when there weren't releasing any games and recruitment would be handled by Microsoft's main team? I'm not convinced.
Silent_Buddha
Legend
Even if Microsoft's HQ team were not micro-reviewing individual roles in their Zenimax acquisitions, Bethesda's management team would have known there was no need for sales and recruiters from the point of acquisition.
Are you suggesting, that the management of Bethesda Games Studio just pretended those people were still needed when there weren't releasing any games and recruitment would be handled by Microsoft's main team? I'm not convinced.
I'm saying that when MS acquired Bethesda they were currently also bulking up their recruiting, sales and management personnel, among others.
In such an environment picking up more of those types of employees with the Bethesda acquisition would be seen as a bonus whereas before and now after Covid's impact on the tech sector that would have been seen as a negative and thus they'd have been let go shortly after the acquistion.
IE - it doesn't make sense to get rid of a certain type of employee if you are currently hiring those types of employees.
However, if you aren't currently hiring those types of employees, it makes sense that you'd let go of any employees who duties are duplicated and don't scale with the acquisition. For example, software engineers would, broadly speaking, scale roughly linearly with the acquisition assuming you aren't going to cancel projects that are being worked on by the acquired company. Recruiting, sales and marketing, however, aren't going to scale linearly so while you may keep some of the recruiting, sales and marketing personnel the acquiring company is likely to be laying off much of the workforce in those areas.
So, TL: DR - MS were in need of recruiters, etc. due to covid's effect on the tech sector so there was no need or desire to let those people go when they acquired Bethesda.
Regards,
SB
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Deleted member 11852
Guest
I assume you're talking about Microsoft, I'm referring to the Bethesda Games Studio cuts. Bethesda Games Studio recruitment used to be done via Zenimax, and Bethesda Softworks (different to BGS) handled comms - that was most Pete Hines for Elder Scrolls and Fallout.
The the recent job cuts included Bethesda Games Studios which is just a dev house. BGS wouldn't have any duplicate functions that existed in Microsoft. Prior to Microsoft's acquisition, those duplicate jobs would have been in other Zenimax divisions. As I said before, these cuts may just be people who are done with Starfield and moving on and the timing may be a coincidence.
Silent_Buddha
Legend
I'm not entirely sure that the layoffs are from the development side over at Bethesda. For example...
While each studio will lean on the parent company/publisher to an extent for non-development things, they'll also generally have their own small staff of PR, HR, recruitment and other staff.
343i layoffs obviously include engineers, which is understandable considering how that studio has underperformed. Around 60 staff from 343i were let go. The layoffs from Bethesda and The Coalition were significantly smaller and I haven't see any mention of development staff being let go versus PR and other non-development personnel at those studios.
Of course, I didn't do extensive searching as I don't have the time. Just what I could find looking at recent news articles about the layoffs.
Regards,
SB
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Deleted member 11852
Guest
Thank you! I hadn't see that. It sucks for the PR people involved but I am relieved that there are no reports of developers being let go.
Ordinarily yes, but in this case the claim is these layoffs are happening because of the economy, not restructuring etc. As such, it's financial pressure to cut costs, no? In which case, why are they spending so much on new acquisitions? I suppose then the argument is the acquisition is more important than those roles and the cuts make available more money for buying ABK, sort of thing, but then that isn't layoffs independent of the acquisition.
It seems a bit like someone saying they cutting back on heating and food because things are tight, and then splashing out on a PS5 and PSVR2 or whatever. Spending big when money is tight seems unwise, but then that's also what (risky) investment is about.
Still, with the explanation given as economic, I don't think your ordinary activities explanation covers events completely satisfactorily.
Silent_Buddha
Legend
Keep in mind this doesn't mean that no development staff were let go.
But if someone on the development staff is underperforming then it might be difficult to survive this round of layoffs depending on how essential they are and whether MS or the development studio feel like they could get a more productive person when staffing needs increase.Still, with Bethesda nearing a potential release date for Starfield, it's hard to imagine anyone on the development staff being let go even if they are chronic underperformers.
Regards,
SB
Silent_Buddha
Legend
The thing is even without the ABK acquisition, MS would be in a position where they would feel the need to lay off people. Basically, it's happening across the entire tech industry so it isn't as if MS would be in a situation where they wouldn't be laying off people.
Pretty much all the big players in the tech industry are cutting back and laying off staff due to macroeconomic conditions due to a variety of factors. The only tech companies that will potentially not lay off personnel are those that didn't staff up significantly during Covid (for example, Apple).
OTOH, for MS:
If anything the layoffs can be blamed on the effects of Covid and its associated lockdown. IE - firstly, excessive hiring to meet demand during lockdown and then afterwards the negative impact on global macroeconomic conditions due to the lockdown's effects on other industries.
Regards,
SB
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Deleted member 11852
Guest
Interestingly, and I suspect not coincidentally, the linked list of companies who have announced layoffs are all in the server or services sector with the sole exception of Tesla, but there are obvious reasons why Tesla are letting people go.
A quick google shows no announcements from AMD, Nintendo, Nvidia or Sony.
I mean lets also not forget that mass lay offs are a easy way of letting go of low performers or problematic employees. Even if engineers were let go they could have been people who had a history of always handing in work late or with issues.
Just removing staff isn't a problem in and of itself if its bad staff its actually a good thing
Silent_Buddha
Legend
Also, this bit about Google not yet laying off people to the extent of the other major cloud providers/tech giants...
seekingalpha.com
So, investors are expecting 2023 to be a relative bloodbath for the tech sector compared to 2022.
Regards,
SB
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seekingalpha.com
So, investors are expecting 2023 to be a relative bloodbath for the tech sector compared to 2022.
Regards,
SB
So why say it's because of economic pressures and not restructuring to align with readjusted goals?
If these are going to happen anyway, it's not because of the money situation so there's no need to blame it on the economy. MS are restructuring to remove excess staff, job done, economy doesn't come into it and then here's $70 billion for ABK.
But. if it's happening because of the economy as claimed, MS doesn't want to let these people go but can't afford to keep them on, right? If they had more money, they could afford to retain these employees. Well, at $200,000 a year generous average wage and costs, 10,000 employees is $2 billion. MS could afford to pay them for 35 years from the price of ABK.
Looking at it another way, how are the other companies laying off staff spending on investments and acquisitions? Are they all spending super-big at the same time as reducing staff to save costs?
Yes.
Google is laying of 12,000 people and they have spent Billions per year to acquire the rights to NFL Sunday Ticket package rights.
Silent_Buddha
Legend
The economy is the reason they need to do it, at least the bulk of it. Because of a downturn in the economy that is now really hitting the tech industry they need to let people go.
It's not as if the economy is doing fine and the tech sector continues to grow, but because of poor execution on their part or a failure to respond correctly in offering the correct products that the company is performing under expectations. If that were the case then yes, realignment or restructuring is called for. IE - change your product stack, change the direction of your R&D, etc. Yes, it could also mean scaling back operations or personnel as you would do if the economy is going bad but you're still executing well.
When the tech industry (tech economy) was booming MS had to bulk up staffing and personnel in order to meet the increased demand on their services. With the tech industry (tech economy) contracting, then it doesn't matter how well they are executing they are going to need to reduce personnel and staffing. You see this every year with most companies as they do seasonal hiring (MS and other's in the tech industry in addition to retail, construction, shipping, etc.). This is different only in that it isn't seasonal conditions that have led to a bulking up of personnel and then a letting go of personnel (seasonal layoffs of contracted workers), instead it is due to macro-economic conditions causing the sector to fall off and thus unexpectedly having to let people go (layoffs).
Above I mentioned the bulk of the layoffs (recruitment, events personnel, etc.) are due to this but 343i obviously doesn't fall into that. 343i is actually going through what people would associate with restructuring due to poor performance of that particular division. However, 343i's layoffs are a drop in the bucket (~60 personnel) compared to the rest of MS (~10k personnel), so for MS as a whole it's layoffs are due to prevailing economic conditions even if scattered layoffs here and there could be associated with restructuring (performance related layoffs). But if you wanted to talk about 343i specifically, you could certainly call that restructuring.
TL: DR - restructuring is generally used when referring to a failure on the part of a company whether in terms of execution, product planning, R&D, etc. IE - The company is at fault (this includes not being able to properly respond to competitor's actions) and is now trying to right the ship. It's not generally used when referring to responses to something that is out of the control of the company like local or global economic conditions, a natural disaster, war breaking out, etc.
Regards,
SB
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Deleted member 11852
Guest
You have to be a bit anxious if you work in a tech company that has not yet announced lay offs.
Really the last one to fall will be apple since they make so much off hardware. I think a lot of people will start to shed subscriptions first and then move on to delaying hardware upgrades.