The USA's new president asked companies to reduce costs through work sharing rather than layoffs. I was at CADalyst magazine when it hit a rough patch in the late 1980s, and I suggested we all take a 10% wage cut instead of firing a couple of the staff. The good thing about the wagecut is that the income tax also goes down; this meant that my net pay fell by just 5%. Five percent was a worthwhile exchange for knowing that my coworkers still had a job.
Two days after the Obama swearing-in love-in, Microsoft's ceo decides to put 5,000 employees on unemployment insurance. And he does it the most evil of ways: for the next 18 months, he holds the threat of 3,200 layoffs over his employees heads. Way to go, Steve.
Result: Guaranteed demoralization and hugely reduced work efficiency.
I worked at a consulting engineering firm in the early 1980s, where the Ballmer tactic was used. Each week, 2-3 employees were called into the branch manager's office. The rest of us immediately knew this would be their last day of work. This went on week after week, for 18 months. The demoralization extended coffee breaks to 45 minutes and lunch time tripled to 1.5 hours. The overall feeling was, "What's the point of getting work done; I might be next."
When I began at the firm in 1981, the office had 125 employees. I was the last to be let go, one month before I was to be married; the office was down to 25. I recall two engineers who had been hired from England. By the time they arrived at our office in Canada, the recession had eliminated the work they were to do. For six months they sat around in the office grousing, waiting for their contract to come to an end.
The only loyalty paid employees have to a company is the paycheque. Threaten the removal of the paycheque, and the loyalty wanders off.
With the number of employees at Microsoft, a 7% paycut would keep the 5,000 jobs.