CHRIS PALADINO, a Microsoft employee who was hired in 2006, didn’t worry too much about his job when the economy began to sour last fall. The company employs nearly 90,000 people.
“I thought Microsoft was so stable, it wouldn’t be touched,” he said. Now, as one of the 1,400 employees who received layoff notices in January, Mr. Paladino is worried — about making the mortgage payments on his home.
Mr. Paladino gathered user feedback for the Xbox games division of Microsoft. This month he started his own consulting company, Promethium Marketing, with two colleagues who were also laid off.
But, “I would never have chosen to leave Microsoft,” he said. “I had a great job. I worked with a great team.”
Leaving the company has not always been so traumatic. Microsoft has a long history of making employees part-owners of the company, by granting them stock and stock options.
From executive to secretary, many employees received thousands of stock options. Microsoft’s stock price rose from about $2.50 a share in 1992 to almost $60 in 1999, and roughly 10,000 of those employees became millionaires.
When employees left the company in those days, it was overwhelmingly by their own choice. They were off to a new adventure, starting a business or a charity, or just planning to have fun, said Rob Horwitz, the chief executive of Directions on Microsoft, an information technology analyst firm that has been tracking the company for 17 years.
Notable alumni from that time rebuilt the Professional Bowlers Association; created the charity Room to Read, which builds schools in poor countries; and founded the Cranium game company (which was sold to Hasbro).
Other Microsoft alumni started venture capital firms or followed more personal dreams, creating enterprises like the Cameron Catering Company of Seattle, which focuses on green events, or the Casa Cupula, a bed-and-breakfast for gay travelers in Puerto Vallarta, Mexico. One alumnus built his own airplane and another rode along with Russian cosmonauts on a space mission. The sky was literally the limit.
The economy has changed all that. With Microsoft’s stock price now below $20 a share, any stock options granted in the last 10 years have little to no value, and the outright stock grants have lost value.
So rather than leaving on their own terms for a new adventure, some recently separated employees are now looking for any professional job they can get. (Microsoft declined to comment for this article.)
Wendy Pravda, a Web marketing manager who was laid off by Microsoft in January, said she was open to working full time for another technology company, part time as a contractor or using her skills in a different industry. “I used to look for all the great perks,” she said. “Now if I can find stability, I’ll be happy.”
In her role as a Web marketing manager, Ms. Pravda directed vendors who bid on Internet search terms and placed advertisements for her products. She says she may need to do such tasks herself in a future job, because “the management layer is gone” at some companies making cuts.
Longer-term employees are more likely to have built up savings and may be less concerned about the immediate future. Corey Salka, who worked for the company for 17 years before he was laid off, said the Microsoft stock and the savings he built in the 1990s would allow him to “hit the reset button” on his career and move into his new passion: renewable energy.
One employee who saw the good and not-so-good times is Maura van der Linden. She came up through the ranks from group assistant to software tester to technical writer over 13 years. She was laid off in January. She remembers when stock options were called golden handcuffs, because they induced people to stay at the company to become wealthy.
Like many other laid-off workers, some former Microsoft employees are connecting through social networking sites like Facebook. One group recently had 196 members and included posts that ranted, lamented and offered advice. Recruiters have also found their way to these social networking groups to advertise jobs.
Microsoft has said it will eliminate 5,000 jobs, including the 1,400 already announced, by mid-2010. Joshua Corneil, who came to Microsoft after college three years ago and was laid off in January, sees a silver lining in being one of the first to be let go.
“I’d rather be in the first 1,400 and get the first shot at the job market here,” he said. “Right now, small companies see me as Microsoft talent, Microsoft trained, and that’s a big deal to them,” he said. “My performance reviews show them it was the economy and not my performance that lost me my job.”
THE layoffs have fostered changes in the company, said Ms. van der Linden, who keeps in touch with colleagues at Microsoft. “People seem more interested in showing off their ideas and what they can do, so they aren’t the next ones to get laid off,” she said.
At the same time, “the people who have kept their jobs seem to have more gratitude toward the company,” Mr. Horwitz said. “It’s still the mother ship, the household name — but now people see that as a sign of strength, not stodginess.”
In the 1990s, the company had a hard time retaining some of its most talented people, Mr. Horwitz said. “People were jumping ship for dot-com this and dot-com that,” he said. Now the pendulum has swung the other way.