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How companies like Microsoft should handle mass layoffs

Thu, 2014-07-17 09:43

Over the next year, Microsoft says it will be cutting up to 18,000 jobs, the biggest job cuts in the company’s history. The cuts are the result of the corporation re-aligning itself after it acquired Nokia in April.

Mass layoffs are very hard on workers, even the ones who are spared, but there are right ways and wrong ways to manage the process. We asked Sara Grant, adjunct associate professor at the Wagner Graduate School of Public Service at NYU and Robert Sutton, professor at the Stanford Graduate School of Business and author of the book, "Scaling up Excellence," for some thoughts.

Here are their suggestions about what managers and companies should do:

Set clear boundaries.

Companies need to be clear about how many jobs are getting cut, when people will know and how they will know. Rumors run rampant in times of uncertainty and it's important for companies to get out in front of the panic as much as they can. It's essential that companies honor these timetables, if they don't, there can be a feeling that the layoffs are never-ending.

Answer the question, "Why?"

Companies need to explain why the layoffs are happening and try to help people make sense of the situation.

Give people some control over the process.

Employees need to have some kind of say in the process and feel like their voices are being heard. Voluntary buyouts are one way to achieve this.

Treat departing workers with respect.

This is crucial. People in management needs to be in the office physically when layoffs are happening. They should be compassionate and present Hiding in their office during this time is not a good idea.

Provide laid off workers with support.

Companies should provide résumé help, wih other advice and support to employees who are leaving. Most importantly, they need to give workers a fair severance package.

Listen to dissenters.

There's often a temptation for companies to punish people who speak out during times of turmoil, but those conversations should be encouraged. Employees need to feel like they're part of the process.

Let people mourn.

Workers are saying goodbye to friends, lunch buddies and supervisors. They're often taking on more work. Be sensitive that the workers who stay will have mixed emotions and need support and time to process a big layoff.

Provide a clear vision for the future.

Employees need to feel like the company has direction. Do this by providing a clear vision to workers about where they are headed and where the company itself is headed.

Would a Marketplace by any other name smell as sweet?

Thu, 2014-07-17 09:09

Retailers spend a lot of time thinking about what the shopping experience is like for customers, and how that reflects on the store’s brand. They think about the signature decor of the store, they think about lighting and they think about overhead music –and they think about the store’s scent. In fact, scent is something they’ve thought long and hard about.

“If [retailers] don’t connect and make it a comfortable, welcoming place to shop, and to spend their money, consumers will go somewhere else” says Andy Kindfuller, CEO of ScentAir. His company creates signature scents based on what he calls “brand attributes.”

Kindfuller is adamant that these aren’t perfumes. Their scents are dispersed through a space with the company’s equipment. They’ve worked with medical waiting rooms where the goal was to create a calming atmosphere, with a hotel whose lobby now subtly smells like cookies and tea, and a sport stadium that smells, as Kindfuller says, “like victory.”

ScentAir works closely with their client’s marketing team as they devise a scent. When it comes to actually creating the fragrance, Kindfuller says it really does boil down to a team of folks in a room with a whiteboard.

“The perfumers that we use, use up to 10,000 different ingredients... what’s amazing is they can identify those 10,000 just by smell and so we will often create a fragrance that can have several hundred different notes.”

Kindfuller and his team even made a scent for Marketplace. We've been having our staff try them out today.

 

Marketplace host Kai Ryssdal:

 

Marketplace reporter Krissy Clark:

 

Marketplace reporter David Weinberg:

<a href="http://marketplaceapm.polldaddy.com/s/what-does-business-smell-like">View Survey</a>

Would a Marketplace by any other name smell as sweet?

Thu, 2014-07-17 09:09

Retailers spend a lot of time thinking about what the shopping experience is like for customers, and how that reflects on the store’s brand. They think about the signature decor of the store, they think about lighting and they think about overhead music –and they think about the store’s scent. In fact, scent is something they’ve thought long and hard about.

“If [retailers] don’t connect and make it a comfortable, welcoming place to shop, and to spend their money, consumers will go somewhere else” says Andy Kindfuller, CEO of ScentAir. His company creates signature scents based on what he calls “brand attributes.”

Kindfuller is adamant that these aren’t perfumes. Their scents are dispersed through a space with the company’s equipment. They’ve worked with medical waiting rooms where the goal was to create a calming atmosphere, with a hotel whose lobby now subtly smells like cookies and tea, and a sport stadium that smells, as Kindfuller says, “like victory.”

ScentAir works closely with their client’s marketing team as they devise a scent. When it comes to actually creating the fragrance, Kindfuller says it really does boil down to a team of folks in a room with a whiteboard.

“The perfumers that we use, use up to 10,000 different ingredients... what’s amazing is they can identify those 10,000 just by smell and so we will often create a fragrance that can have several hundred different notes.”

Kindfuller and his team even made a scent for Marketplace. We're having our staff try them out today.

 

Microsoft: biggest job cuts ever

Thu, 2014-07-17 07:00

Microsoft announced it will be cutting up to 18,000 jobs over the next year; the biggest job cuts in the company’s history. The layoffs are part of a plan to re-align itself after its acquisition of Nokia in April. 

Microsoft CEO Satya Nadella broke the news in an all-staff email, saying the layoffs are necessary to streamline the company. 

"We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers," Nadella writes.

The move comes as Microsoft tries to shift more of its business toward cloud and mobile computing, as well as become more efficient.

“People view Microsoft as being sluggish," says Colin Gillis, a senior tech analyst at BGC Financial. "The new management want to change that and change the culture. We’ll see how this works."

Gillis says two thirds of the workers losing their jobs are former Nokia employees who became part of Microsoft after the companies merged. According to the announcement, the layoffs will mostly be complete by the end of this year.  

 

Microsoft: biggest job cuts ever

Thu, 2014-07-17 07:00

Microsoft announced it will be cutting up to 18,000 jobs over the next year; the biggest job cuts in the company’s history. The layoffs are part of a plan to re-align itself after its acquisition of Nokia in April. 

Microsoft CEO Satya Nadella broke the news in an all-staff email, saying the layoffs are necessary to streamline the company. 

"We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers," Nadella writes.

The move comes as Microsoft tries to shift more of its business toward cloud and mobile computing, as well as become more efficient.

“People view Microsoft as being sluggish," says Colin Gillis, a senior tech analyst at BGC Financial. "The new management want to change that and change the culture. We’ll see how this works."

Gillis says two thirds of the workers losing their jobs are former Nokia employees who became part of Microsoft after the companies merged. According to the announcement, the layoffs will mostly be complete by the end of this year.  

 

The bad code that hacked its way into the Nasdaq

Thu, 2014-07-17 05:00

A new article in Bloomberg Businessweek explores what looked a few years ago to U.S. officials like a massive cyberattack directed against one of the big American stock exchanges, the Nasdaq market. 

Reporters have been piecing together the hunt -- not for Red October -- but for the origins of dangerous software that was somehow hacked into Nasdaq's computers. The bad code has long since been eradicated.

According to Bloomberg Businessweek reporter Michael Riley, the malware was discovered by the FBI in late 2010, tracked by the National Security Agency, and determined to likely be Russian in origin.  

Click the media player above to hear Bloomberg Businessweek reporter Michael Riley in conversation with Marketplace Morning Report host David Brancaccio.

PODCAST: Microsoft's big firing

Thu, 2014-07-17 03:00

First up, more on the motivation behind Microsoft's announcement that it will layoff as many as 18,000 employees by the end of the year. Plus, a new report from Bloomberg Businessweek looks at malware that was hacked into the Nasdaq computer in 2010, most likely by Russians

PODCAST: Microsoft's big firing

Thu, 2014-07-17 03:00

First up, more on the motivation behind Microsoft's announcement that it will layoff as many as 18,000 employees by the end of the year. Plus, a new report from Bloomberg Businessweek looks at malware that was hacked into the Nasdaq computer in 2010, most likely by Russians

That perfect 'Seinfeld' episode about cable companies

Thu, 2014-07-17 03:00

Even though I got it, I never really got the "Seinfeld" Plaza Cable gag fully until I moved to New York City.

In my first apartment, I remember that even getting the cable installed and trying to start to pay the cable guy real money every month felt like an epic right of passage. That 1996 episode of television -- airing a decade before I even came to the city -- became, like so many "Seinfeld" depictions, a chrystalized experience in an ever-changing city. Watching it now nearly ten more years later, it remains pitch perfect. Just watch this and tell me you can't relate. I dare you. 


The weird 4-hour appointments, the long hold times on the phone, the grumpy dude in the van -- it's all there. Kramer as the everyman is exactly as he should be: Incredulous at a seemingly arbitrary and faceless bureacracy, righteous in his indignation, and happy to "stick it to the man," even when the man is of course a real person with real feelings.

It is actually really elegant how the roles are flipped. The cable guy becomes the powerless person waiting around as his blood is brought slowly to boil. Kramer is what we percieve the cable company to be: Snickering behind a peephole and messing with us while taking advantage because there's really not much we can do about it.

This has been an interesting week for media and cable companies. Rupert Murdoch's $80 billion bid for Time Warner is almost just a rumble behind the awkward sound of that customer service call between an Engagdget editor and a Comcast customer service agent. In a veritable monster mix of smash hits, it's the latest and greatest viral example proving the cable company is pretty much the worst at dealing with its customers.

Comcast is currently on a full court press for its unprecedented merger with Time Warner Cable -- Which, by the way, just sent me the most rediculous letter congratulating me on my newly-reduced-but-still-more-than-I've-been-paying rate. And at the same time from Reddit to The New Yorker, the company is also this week's modern stand-in for Seinfeld's Plaza Cable. 

The fact that the jokes are still relevant is what's really disturbing. In "Seinfeld," the cable guy apologizes through the door, and Kramer, moved, rolls back the deadbolt. They hug. What could be better? A truce between customer and company, a promise to do better, and a regonition of the humanity and hardships on both sides.

I think I prefer the TV show to real life. "Seinfeld," at least, has a happy ending.

Students experiment in zero-gravity

Thu, 2014-07-17 02:00

This week, a group of students are heading to NASA's Reduced Gravity Education Flight Program. True to its name, the program puts particpants in a plane that flies up and down, approximating zero gravity so the young scientists can do their work. 

Ish Sanchez, who is studying Mechanical Engineering at San Jose State University, is one such student participating in the program. He says being in an environment without gravity is profoundly different from the typical human experience.

“Your whole outlook on life -- up until the point when you experience zero gravity -- is completely shifted,” says Sanchez. “There’s no up and down, there’s no side walls. The mere act of pushing a button can send you off in another direction.”

The group wants to study particles created in potential in-space manufacturing or asteroid mining operations — The experiment will cut some carbon fiber rods and observe the different particle trajectories from cutting in zero gravity.

Though after this round of experiments, there may be a failure to launch -- The program is being cancelled due to budgetary constraints after this flight.

Students experiment in zero-gravity

Thu, 2014-07-17 02:00

This week, a group of students are heading to NASA's Reduced Gravity Education Flight Program. True to its name, the program puts particpants in a plane that flies up and down, approximating zero gravity so the young scientists can do their work. 

Ish Sanchez, who is studying Mechanical Engineering at San Jose State University, is one such student participating in the program. He says being in an environment without gravity is profoundly different from the typical human experience.

“Your whole outlook on life -- up until the point when you experience zero gravity -- is completely shifted,” says Sanchez. “There’s no up and down, there’s no side walls. The mere act of pushing a button can send you off in another direction.”

The group wants to study particles created in potential in-space manufacturing or asteroid mining operations — The experiment will cut some carbon fiber rods and observe the different particle trajectories from cutting in zero gravity.

Though after this round of experiments, there may be a failure to launch -- The program is being cancelled due to budgetary constraints after this flight.

Don't blame millennials. Blame the middle-aged!

Thu, 2014-07-17 02:00

There's a common refrain about the sluggish housing market these days that goes something like: "Those darned young folks just aren't buying houses like they used to."

Well, that diagnosis isn't quite right, according to a new study from Trulia, the online real estate firm.

Trulia Chief Economist Jed Kolko says if you look at the data, "18-to-34-year-olds today look about as likely to own a home as 18-to-34-year-olds did 20 years ago, once we adjust for the big changes in demographics."

Kolko points to demographic changes like the fact that today's young adults are much less likely to be married or have kids than their counterparts 20 years ago. When you look at the young adults today who still are married with kids, he says they are buying homes at the same rates as they did in 1997.

But there is a generation where homeownership really has declined since the rise and fall of the real estate market in the 2000s, even when you adjust for demographics.

"The 35-to-54-year-old group was more affected both by the housing bubble and by the foreclosure crisis," Kolko says.

Graphics from Trulia, depicting adjusted homeownership rates for 18-to-34 year olds and 35-to-54 year olds compared to a demographic baseline. The demographic baseline is a depiction of we'd expect to happen with those demographic if the recession, or any other behavioral changes, didn't occur. (Graphics courtesy of Trulia)

Of course, even that generation might not be gone from the housing market forever. Amy Gerrish, 36, lost her home outside of Phoenix, Ariz. to foreclosure in the early days of the real estate crash, and then reluctantly became a renter.

She knew it would take at least three years after the foreclosure to be considered for a home loan again.

"As soon as that date started coming up, we started looking," she says.

She now is a homeowner once more.

We reached out to listeners on Twitter to ask about their experience with the housing market. Here are some of the responses:

[<a href="//storify.com/Marketplace/middle-age-homebuyers" target="_blank">View the story "Middle-Age Homebuyers" on Storify</a>]

Facebook wants to know what you're watching

Thu, 2014-07-17 02:00

Let’s face it, we use our smart phones for just about everything, including watching television.

This fall, TV ratings giant Nielsen and Facebook will join forces to follow what we watch on our mobile devices.

Dorie Clark teaches corporate and personal branding at Duke University's Fuqua School of Business. She says the new tracking system is a "necessary evolution."

“People are consuming far more video on their smart phones, on their I-Pads,” says Clark. “And if we want to make smart decisions about how to allocate marketing dollars, we need to know what they’re watching and where.” 

But there could be privacy concerns.

A Facebook spokesperson says the new system can’t be used to identify individuals. Even though Facebook and Nielsen announced the partnership last year, recent controversy over Facebook manipulating content to influence users’ emotions as part of a survey worries privacy advocates.

Jeff Chester, Executive Director of the Center for Digital Democracy, for example.

“It’s just one piece of a much more disturbing picture that’s emerging as Facebook links with these powerful market research companies to understand what we do and when we do it,” says Chester. 

 

That perfect 'Seinfeld' episode about cable companies

Thu, 2014-07-17 01:00

Even though I got it, I never really got the "Seinfeld" Plaza Cable gag fully until I moved to New York City.

In my first apartment, I remember that even getting the cable installed and trying to start to pay the cable guy real money every month felt like an epic right of passage. That 1996 episode of television -- airing a decade before I even came to the city -- became, like so many "Seinfeld" depictions, a chrystalized experience in an ever-changing city. Watching it now nearly ten more years later, it remains pitch perfect. Just watch this and tell me you can't relate. I dare you. 


The weird 4-hour appointments, the long hold times on the phone, the grumpy dude in the van -- it's all there. Kramer as the everyman is exactly as he should be: Incredulous at a seemingly arbitrary and faceless organization, righteous in his indignation, and happy to "stick it to the man," even when the man is of course a real person with real feelings.

It is actually really elegant how the roles are flipped. The cable guy becomes the powerless person waiting around as his blood is brought slowly to boil. Kramer is what we percieve the cable company to be: Snickering behind a peephole and messing with us while taking advantage because there's really not much we can do about it.

This has been an interesting week for media and cable companies. Rupert Murdoch's $80 billion bid for Time Warner is almost just a rumble behind the awkward sound of that customer service call between an Engagdget editor and a Comcast customer service agent. In a veritable monster mix of smash hits, it's the latest and greatest viral example proving the cable company is pretty much the worst at dealing with its customers.

Comcast is currently on a full court press for its unprecedented merger with Time Warner Cable -- Which, by the way, just sent me the most rediculous letter congratulating me on my newly-reduced-but-still-more-than-I've-been-paying rate. And at the same time from Reddit to The New Yorker, the company is also this week's modern stand-in for Seinfeld's Plaza Cable. 

The fact that the jokes are still relevant is what's really disturbing. In "Seinfeld," the cable guy apologizes through the door, and Kramer, moved, rolls back the deadbolt. They hug. What could be better? A truce between customer and company, a promise to do better, and a regonition of the humanity and hardships on both sides.

I think I prefer the TV show to real life. "Seinfeld," at least, has a happy ending.

California farms pumping water to make up for drought

Wed, 2014-07-16 13:27

This is the third-driest year in California in at least 106 years. The drought has led state officials to clamp down on water waste, like open hoses. Fines can hit $500. 

The drought is having its biggest effect on California’s mammoth agriculture industry. A report from UC Davis’s Center for Watershed Sciences pegs losses at $2.2 billion this year. 

“There will be some pockets of deprivation, poverty,” says Josué Medellín-Azuara, a UC Davis researcher who worked on the report.

Four hundred square miles of farmland has been fallowed—mostly lower-value crops like alfalfa. More than 17,000 seasonal farm workers are affected.

“It takes people to provide nutrients for those crops. It takes people to even insure those crops. It takes people to truck those crops to market,” says Bruce Blodgett, executive director of the San Joaquin Farm Bureau.  

The drought’s impact could be far worse, though. 

Farmers in the Central Valley have managed to find another source for 75 percent of the water they normally get from state and federal reservoirs. They’re drilling deep into underground aquifers, pumping out enough water to cover 7,800 square miles a foot deep.  

“I’m fortunate enough to have a well for groundwater, but it’s caused our electric rates to probably triple,” says Thomas Ulm, a farmer in Modesto. 

Ulm’s farm is getting only half the reservoir water it’s usually allocated, so he’s relying on his own well to keep his almonds, walnuts and grapes growing. 

His neighbor just drilled a well, too. All this drilling and pumping is unregulated and, “Eventually, of course, you run out of water,” says Robert Glennon, a professor at the University of Arizona, and the author of “Unquenchable: America’s Water Crisis and What To Do About It.” 

If the state’s groundwater is like a giant milkshake glass, “what California is allowing is a limitless number of straws in the glass,” he says. “That’s a recipe for disaster. It’s utterly unsustainable.”

Especially when this drought could last another year, or another 50.

 

Pardon my (economic) language

Wed, 2014-07-16 13:27

Apparently, and this kind of stands to reason, the use of profanity by CEOs varies with economic conditions.

Bloomberg actually went through and did a word search of earnings call transcripts for the past 10 years. Profanity peaked in 2010, dipped a bit, shot up again in 2012 and has been declining ever since.

I know you want to know what the words are, but I really need my job.

There's a chart that'll give you the details, though:

A screenshot of Bloomberg's graphic on CEO cursing. For more detail, see the full graphic. (Courtesy of Bloomberg)

Dallas Fed Chair: Time to lose monetary "beer goggles"

Wed, 2014-07-16 12:35

"The punch in that punch bowl is still 108 proof," says Dallas Federal Reserve Bank Chair Richard Fisher. "Things look better when you have a lot of liquidity in your system."

He's calling on Washington to end the taper and rasie interest rates, something he believes will happen by October.

Chairman Fisher gave a speech on monetary policy today at USC Annenberg and stopped by Marketplace to chat afterwards.

Here is a link to his full speech, titled " Monetary Policy and the Maginot Line (With Reference to Jonathan Swift, Neil Irwin, Shakespeare’s Portia, Duck Hunting, the Virtues of Nuisance and Paul Volcker)".  Listen to his full conversation with Kai Ryssdal in the audio player above.

Apple-IBM deal shakes up workplace tech

Wed, 2014-07-16 11:29

Apple and IBM were once rivals but the two companies announced a plan Wednesday to work together. They will collaborate on software and cloud services, and IBM will distribute Apple products to some of its biggest customers – big business, universities, and the government.

This deal is a way for Apple,  maker of the iPhone and the iPad, to get more of those mobile devices into the workplace – historically BlackBerry’s and Microsoft’s turf. According to Norman Young, an analyst with Morningstar, this deal may have caught them by surprise.

“They didn’t really think that Apple would really compete in this space, because they never really had,” he says.

For a long time, Apple’s focus has been on consumers, but according to Stacy Crook of the market research company IDC, Apple has been making inroads. The workplace has seen more of what she calls “B.Y.O.D.”

“We just use the same device for our business use and our personal use these days,” she says.

IT guys and gals have tolerated that – sometimes grudgingly. These days, when we bring our own devices, odds are they are not BlackBerrys. 

“You know, from a BlackBerry’s perspective, this is pretty significant,” says tech analyst Sharon Cross, of Cross Research. She says BlackBerry made its name selling its devices to big business, and the security of its network was a huge selling point. With this new partnership, Apple and IBM say they will give corporate clients the assurance their apps and devices will be just as secure.

So what about Microsoft?

“This agreement is good for Apple, it’s good for IBM, it’s bad for BlackBerry, and it’s really not that impactful to Microsoft,” Cross says, noting companies will still buy PCs running Windows.

IBM could have partnered with Google. After all, Android phones remain popular. But according to Roger Kay, the head of Endpoint Technologies Associates, Apple’s trademark simplicity may have given it an edge.

“IT managers don’t have to deal with a hugely complex environment,” he says. “They know kind of what they’re getting.”

There are hundreds of different types of phones and tablets that run the Android operating system. With Apple, there’s just a handful.

 

Why Murdoch wants Time Warner: leverage

Wed, 2014-07-16 11:27

As chairman of 21st Century Fox, Rupert Murdoch owns many things: cable networks, a broadcast network and a big movie studio. As head of News Corp. he also owns some newspapers and a book publishing house. Now he’s also made a bid for Time Warner, which owns HBO, other cable networks and another big movie studio. Time Warner has turned him down, for now, but it’s worth asking what he wants with it.

Analysts say Time Warner has finally shrunk itself to the exact right size and shape for someone like Rupert Murdoch to be interested in it.

“Time Warner used to have AOL as part of its portfolio— that’s no longer true,” says Jim Goss, managing director of Barrington Research. “It obviously had Time Inc., the magazine publishing group, but as of about a month ago, that’s no longer true.”

Most importantly, Comcast's proposed takeover of Time Warner Cable creates a huge potential adversary on the other side of the bargaining table: Distribution. That’s Murdoch’s adversary too.

Together, the two media companies gain clout. “Fox with Time Warner would have incontestable leverage against any distributor in terms of audience demand,” says Porter Bibb, managing partner at Mediatech Capital Partners. “People would go beserk if they couldn’t get what Fox would own.”

Think: Game of Thrones. And sports: Turner Broadcasting has a lot of NBA games.

Conventional wisdom holds that this marks the beginning of a long campaign. Over a decades-long career, Murdoch has pursued other deals relentlessly.

“He likes to win,” says Samuel Craig from NYU’s Stern School of Business. “I think he’ll persist.”  

Craig says Murdoch may find allies on the other side of the table. “I think when the shareholders of Time-Warner look at it — and the price goes up a bit — they may say, ‘This is a pretty good deal, and we should do it.’”   

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