Johnny Awesome
Veteran
MS is trying to "realign" into a company that mainly keeps good employees on staff and not underperformers. 
UBIsoft in potential financial trouble
- Thread starter Silent_Buddha
- Start date
On the point of companies doing layoffs while spending large amounts of money, Amazon layed off 18K while looking to spend $35 Billion for expansion. Even with whatever grants they receive, they are spending far more for projected growth while shrinking to improve cost-cutting now.
Per the release from Youngkin’s office, the cloud computing arm of Amazon.com Inc. (NASDAQ: AMZN) will establish “multiple data center campuses,” with “numerous localities” under consideration. Ultimately, Youngkin’s office said, the investment will create 1,000 new jobs.
In return, per the release from the Republican governor's office, Virginia is working on a “Mega Data Center Incentive Program,” to include a custom performance grant for AWS of up to $140 million “for site and infrastructure improvements, workforce development and other project-related costs,” in addition to up to a 15-year extension of the state’s data center sales and use tax exemption. Youngkin's release suggests the incentive package has already been considered by the Major Employment and Investment Project Commission, a legislative panel that considers incentives worth at least $10 million, generally for economic development projects exceeding $250 million in capital investment and creating more than 400 new full-time jobs.
The proposed incentives, which will require General Assembly approval, would be in addition to the cash grants Amazon is eligible to receive for its second headquarters development in Arlington — up to $750 million depending on its total hires, bringing its total potential cash incentives to just shy of $900 million. The first phase of HQ2 at Metropolitan Park is scheduled to debut this summer.
AWS operates numerous existing data centers across Northern Virginia and maintains an East Coast office hub in Herndon. Roger Wehner, director of economic development for AWS, said the company has already invested $35 billion in Virginia since 2006.
Virginia’s data center sales tax exemption cost the state a record $135.9 million in fiscal 2022, the Washington Business Journal previously reported. The tax break, which is largely responsible for the commonwealth’s global data center dominance, is set to sunset in 2035 unless reauthorized by the General Assembly. Under the program, the state forgoes sales and use taxes on qualifying computer equipment, enabling software and other hardware found in data centers.
Amazon Web Services plans to invest $35B in Virginia data centers, create 1,000 jobs in return for more cash grants
Amazon Web Services plans to invest $35 billion in new data center campuses across Virginia through 2040, Gov. Glenn Youngkin announced Friday, and with that commitment, the cloud computing giant could secure more cash grants from the commonwealth.Per the release from Youngkin’s office, the cloud computing arm of Amazon.com Inc. (NASDAQ: AMZN) will establish “multiple data center campuses,” with “numerous localities” under consideration. Ultimately, Youngkin’s office said, the investment will create 1,000 new jobs.
In return, per the release from the Republican governor's office, Virginia is working on a “Mega Data Center Incentive Program,” to include a custom performance grant for AWS of up to $140 million “for site and infrastructure improvements, workforce development and other project-related costs,” in addition to up to a 15-year extension of the state’s data center sales and use tax exemption. Youngkin's release suggests the incentive package has already been considered by the Major Employment and Investment Project Commission, a legislative panel that considers incentives worth at least $10 million, generally for economic development projects exceeding $250 million in capital investment and creating more than 400 new full-time jobs.
The proposed incentives, which will require General Assembly approval, would be in addition to the cash grants Amazon is eligible to receive for its second headquarters development in Arlington — up to $750 million depending on its total hires, bringing its total potential cash incentives to just shy of $900 million. The first phase of HQ2 at Metropolitan Park is scheduled to debut this summer.
AWS operates numerous existing data centers across Northern Virginia and maintains an East Coast office hub in Herndon. Roger Wehner, director of economic development for AWS, said the company has already invested $35 billion in Virginia since 2006.
Virginia’s data center sales tax exemption cost the state a record $135.9 million in fiscal 2022, the Washington Business Journal previously reported. The tax break, which is largely responsible for the commonwealth’s global data center dominance, is set to sunset in 2035 unless reauthorized by the General Assembly. Under the program, the state forgoes sales and use taxes on qualifying computer equipment, enabling software and other hardware found in data centers.
Silent_Buddha
Legend
Keep in mind like with many such cases the people being laid off are generally unconnected to new expansions or new hires.
IE - many of the people being laid off are related to development of new products, existing products (Alexa personnel is being cut for example), expansion into other areas (diversification), etc.
Basically anytime there's a contraction in the economy whether local, regional, or global, businesses will double down on their core business segments (the ones that are proven to be profitable) while cutting or reducing expenditures in unprofitable segments (like Alexa for Amazon) or unproven segments (areas the business is trying to diversify into).
The goal is to weather a downturn in order to emerge in a good enough state that they can resume either trying to turn around an unprofitable division and/or resume attempts at diversifying into different business segments.
Regards,
SB
IE - many of the people being laid off are related to development of new products, existing products (Alexa personnel is being cut for example), expansion into other areas (diversification), etc.
Basically anytime there's a contraction in the economy whether local, regional, or global, businesses will double down on their core business segments (the ones that are proven to be profitable) while cutting or reducing expenditures in unprofitable segments (like Alexa for Amazon) or unproven segments (areas the business is trying to diversify into).
The goal is to weather a downturn in order to emerge in a good enough state that they can resume either trying to turn around an unprofitable division and/or resume attempts at diversifying into different business segments.
Regards,
SB
Oh entirely. I understand how businesses makes decisions. However that doesn't impact the emotional centers of folks who see the Contraction and Expansions as incompatible. So the question Shifty asked on that point has 3 different companies doing it, contracting while drastically expanding.
D
Deleted member 11852
Guest
At least this is a clear investment in Amazon's core business. Microsoft holding a private Sting concert in Davos the night before laying people off, not so much. Why Sting?
For the people that were laid off, that's gotta .... Sting.At least this is a clear investment in Amazon's core business. Microsoft holding a private Sting concert in Davos the night before laying people off, not so much. Why Sting?
Why Sting?
They probably looked up hypocritical, tax-avoiding past-it musicians on Google, and I guess Bono was busy that day?
The discussion on here was around the xbox division. The statement put out is MS company as a whole.
My thoughts:
I will say the optics isn't great, buying ABK while the headline 10k let go. It is just that though optics. But just how many is in the xbox division?
343i - Halo is an absolutely huge studio which has released their game. The staffing requirements will be different with different skill sets. That's not even taking into account how halo has under performed. That would be enough to close many other studios or even put company at risk.
Bethesda - not heard too many dev side losses. If its HR etc makes sense and to an extent expected.
Xbox should create a support studio and give option to people that was being let go.
Think they could do with couple support studios.
Was going to edit and say something more of that nature but thought was pretty obvious.
It's across many big tech companies, so for the 40k+ individuals it's extremely horrible and personal. Don't think anyone here doesn't feel for them, or been in similar situation (know I have) .
But it's optics especially if it's not a lot in the xbox division. If they wasn't buying ABK, pretty sure 343i would've still been scaled back.
I'm just glad all things considered Ubisoft not let people go.
I'm repeating in the context of what I'm discussing.
I'm talking about the xbox division which isn't 10k. I.e normal scaling up and down etc. But it looks bad due to what's happening in the company and tech industry as a whole.
But if you are having trouble understanding what I'm saying, or believe anyone on here is heartless and can't discuss with that as a given. Don't know what to say to you.
Are Ubisoft not mostly in less market capitalistic countries? I assume letting a bunch of people go in France/EU is harder than in USA.
So that might be a reason for not going there yet or they might have similar rules as we in Norway, where you put them on "leave of absence" (permisjon in Norwegian) that means they do not work, but get a % of salary from the state. And when the company needs more people, you got first dibs on those positions again. You are of course free to get another job if you want. Technically, the company have not let anyone go.
As for optics, I agree with DSoup, I feel the word optics is used to distance and make situation more surgical. You also get to push a narrative that turns it around to get sympathy for the company.
Never feel sorry for the company, never ever ever, if they have too, the owners are loyal to themselves first and foremost.
So never belive the "we are a family" spiel, I say this as a small business owner
On top of that, letting people go when everybody else is, might hit your stock price less than if you are the only one.
Couple if multi-nationals I have worked with, they just nuke a whole level of middle managers ever 2-3 years, just to shake up the org and get in people that are cheaper than the current ones. It puts extra strain on those that are left, but it looks good on future projections, so the stock price goes up.
So that might be a reason for not going there yet or they might have similar rules as we in Norway, where you put them on "leave of absence" (permisjon in Norwegian) that means they do not work, but get a % of salary from the state. And when the company needs more people, you got first dibs on those positions again. You are of course free to get another job if you want. Technically, the company have not let anyone go.
As for optics, I agree with DSoup, I feel the word optics is used to distance and make situation more surgical. You also get to push a narrative that turns it around to get sympathy for the company.
Never feel sorry for the company, never ever ever, if they have too, the owners are loyal to themselves first and foremost.
So never belive the "we are a family" spiel, I say this as a small business owner
On top of that, letting people go when everybody else is, might hit your stock price less than if you are the only one.
Couple if multi-nationals I have worked with, they just nuke a whole level of middle managers ever 2-3 years, just to shake up the org and get in people that are cheaper than the current ones. It puts extra strain on those that are left, but it looks good on future projections, so the stock price goes up.
Just to point out it isn't particularly 'emotional centers' but sensible, economic logic, only on a different economic model to those that businesses operate with. Looking at a household-income level, as I say, you don't cut back on costs on essentials only to spend large on luxuries. That same logic applied to corporations makes their moves look illogical, but the logic there is present in terms of investment, plus Business has its own language that isn't natively compatible with ordinary language and leads to confusion among the uninformed.
While I don't disagree with this, and I don't think that keeping 10k employees would bankrupt Microsoft in this case, it is in the best interest of the company and everyone still employed at Microsoft that Microsoft doesn't put themselves in a troubled financial position.
I don't feel sorry for Microsoft. But I am able to look at the current economic state of the the world, the forecast of an impending recession, and the current inflation, and understand why a company would proactively start tightening the purse strings. It sucks for the people who were let go, I hope they land on their feet.
Silent_Buddha
Legend
It does make sense in terms of household expenditures, however.
Food, utilities, rent/mortgage, etc. are all analogous to the "core" businesses of a business. While TVs, a new car, GPUs, etc., basically luxury goods, are the non-core parts of the business (like trying to diversify) or underperforming parts.
In a tough economy a household still needs to spend on those necessities and in fact often have to increase spending (for example, eggs almost doubled in price here in the US due to the Avian bird flu hitting chicken farms) in order to continue to survive.
A company also needs to increase spending even in tough economic times in their core businesses if they can if they want to remain relevant and/or maintain their current market position. They can't choose to stop competing (spending) if their competitors continue to aggressively move in their core business sectors. If they don't increase spending to keep up with their competition in their core business sectors then they risk becoming irrelevant by the time economic conditions improve. Of course, if everyone is cutting expenditures across the board because it's that bad and they don't have other non-essential/non-core areas from which to cut expenditures then then there won't be any expansion in the core business segments.
Similar to how if a household doesn't have any extra spending they can cut, they won't be able to raise core (essential) spending (like food, or clothing, or gas/electricity for driving to work, etc.) if those are impacted by worsening economic conditions ... at which point there's some really tough decisions to make including potentially going homeless, etc.
Sure, what business do is on a significantly larger scale, but in many ways they operate similar to households with larger corporations having more options than small corporations similar to larger and more affluent households having more options than smaller and less affluent households.
Regards,
SB
I don't think that works. ABK acquisition is not analogous to increasing costs of essentials. MS aren't having to shell out $70 billion because their current expenses are increasing. If MS doesn't buy ABK, there's no clear, obvious impact to their operations in this difficult economic environment.
You'll have to convince me that MS spending $70 billion on ABK is as important to them as some household spending 20% more on groceries than they did this time last year because they've no choice but to spend that.
You'll have to convince me that MS spending $70 billion on ABK is as important to them as some household spending 20% more on groceries than they did this time last year because they've no choice but to spend that.
Daddy needs a new computer so you kids are eating cheezits for lunch.
Indeed. I think the MS metaphor requires Daddy to need a new computer to get the new job to pay for real food, so it's kinda justified, a necessary sacrifice. Only he's looking at getting a Mac Pro...
Johnny Awesome
Veteran
Business is business. You guys are twisting yourselves into knots over all this stuff. ABK is a long-term investment. Cutting 10k unneeded positions is a medium term decision. They aren't incompatible. Neither is having a party that was probably planned a year ago and likely something they can't get out of at this point.