Wednesday, May 6, 2009

Resignation Instead of Layoffs

In January of this year Mr. Ballmer announced that the company was going to initiate a process of laying off 5,000 employees. This was announced by Mr. Ballmer in an attempt to please Wall Street. Recently Mr. Ballmer announced Phase 2 of the layoffs. Refer to:

Naturally, there are numerous sites that indicate the announcement. However, we choose Seattle since it is close to the Hallowed Gates to Microsoft.

Let's summarize.

During Mr. Ballmer's tenure as CEO he pursues billions in acquisitions. Despite this massive spending the company is equally reliant on its cash cows for revenue as it was a decade ago. The primary revenue is derived from OS and Server and Tools.

The acquisitions could also include the failed attempt to acquire Yahoo. It has been mentioned numerous times on this blog that it was a 65% premium bid valued at $45 billion. An analyst with Goldman Sachs stated it was the stupidest move in the company history. However, since the company Online Division had only 8% of the market it was necessary that Mr. Ballmer try to improve his previous failure in this division. The acquisition demonstrates that Mr. Ballmer was to late to gain dominance in this important sector.

The company has deployed billions towards R&D. Despite this massive spending the company has created the Zune, Microsoft Mobile and Vista. According to Mr. Ballmer the Zune was going to destroy Apple. Does anyone other than Mr. Ballmer even remember the Zune?

The success of Microsoft Mobile it evident with the recent announcement that Verizon and Microsoft are going to build a Smart phone. Once again, it will probably prove to be to late to gain any significant market share. Is Mr. Ballmer so dilussional that he believes that a Microsoft Smartphone at this stage in time will compete with iphone or Blackberry?

Suggestion to Mr. Ballmer. If you want a opportunity to compete with Apple and RIM, we suggest that you acquire the later.

There is also the reception of consumers with Vista. The company is losing share in OS and Mr. Ballmer has failed to insulate the company from its dependance on OS. This reality is demonstrated with the company recent earnings release.

Mr. Ballmer deployed $40 billion towards share buybacks. Despite deploying $40 billion the company shares remained flat and stagnant.

Mr. Ballmer has blamed numerous circumstances for the company perfomance and the stagnant share price. Reports indicate that the only real blame for the company performance and stagnant share price is Mr. Ballmer.

Mr. Ballmer has destroyed the company. Mr. Ballmer is leading the company towards a precipice. In a poll with GlassDoor and CNBC, Mr. Ballmer is voted one of the worst CEO's in the technology sector. Refer to

It could be argued that the company has experienced growth in revenue and earnings. This shouldn't be counted as a tremendous accomplishment based on emerging markets and controlling 80% of the OS market.

The company is losing share in OS, it's trailing in Online, its trailing in mobile. Mr. Ballmer has not only destroyed the company from a financial perspective but also the company image. With the release of Vista and Zune the company has a battered image. This is demonstrated by the Apple advertisements.

More importantely Mr. Ballmer has destroyed the company morale. For a view of company morale refer to Mini Microsoft at

If Mr. Ballmer truly wants to please Wall Street, analysts, employees and shareholders..instead of layoffs he should announce his resignation. The biggest favor Mr. Ballmer can do for the morale of the company and future of the company is resign.

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