"There should be no Business Group, Technology Group or Business Unit-funded holiday parties." That's the extra bullet through the heart in an email being sent around Cisco. I've screencapped only part of it, because I promised not to provide any pointers to my leaker. Here's the ASCII text version:
Prepare to die, entitled Conde Nasties! Conde has always had a well-deserved reputation as the most opulent and self-important of all magazine publishing companies. Those days are coming to an end. The (gender-neutral!) diva culture that spawned The Devil Wears Prada and a million young aspiring media people who thought that a magazine employee could live the lifestyle of an investment banker—it's all on the way out. We come to bury you, Conde Nast culture, not to mourn you. Contemplate this, special ones: you may soon be forced to travel in (and pay for) common taxi cabs, like the poors! And it gets worse:
The economic pain continues to trickle down: Cisco is cancelling a two-week sales conference planned for next August in San Francisco. Conferences like this are a combination of boot camp, old-fashioned tent revivals, and frat keggers, held to rev up a company's revenue generators; ostensibly meant to educate salespeople about new products and compensation plans, they more often devolve into debauchery.For Cisco, even the cancellation is a sales opportunity; the company is pitching it as an example of the money-saving potential of its videoconferencing and teleworking products. Boring! Throwing money at salespeople is the best way to make them feel loved — just another sign that Cisco has no real understanding of what a human network really means. It also suggests CEO John Chambers's influence is waning at the company — since this is the kind of event at which his evangelical delivery shines.
As recently as a year ago, Google was scrambling to get more office space in New York's Chelsea neighborhood. Now, just as swiftly, it's trying to offload it, putting 50,000 square feet up for sublet. The company has cut back on snacks in New York, as elsewhere — but real estate is a far more serious thing to trim. With less room for warm bodies, it suggests Google will soon be shedding staff.
Call it Company (Red). Michael Dell is asking employees at his computer maker to take five unpaid days off and thus help the company trim costs instead of slashing jobs. Extorting your people by suggesting they take a small hit now as opposed to a larger hit later on isn't particularly original. “We’ve seen a slowdown in spending,” says a Dell spokesbot, “but the primary reason is to ... to better position Dell for long-term competitiveness.” That makes no sense: Skimping on five days of payroll may temporarily give the company's bank account a fillip, but it doesn't change its permanent cost structure. Then again, maybe Dell's strategy is to drive away employees who are capable of doing math.
In January, Yahoo launched Yahoo Live, "social TV, where you're the star!" Ten months later, Yahoo Live currently has 1,381 people watching 47 live channels. No surprise that Yahoo's going to pull the plug next month. Boilerplate bogosity by Yahoo techie Keith Thornhill: "Without all of you, Y!Live would not have built the strong community that it has."
Cisco, the San Jose-based networking-equipment giant, is closing its free campus gyms — and replacing them with a new, larger one for which employees will have to pay $20 a month. In explaining the change, Cisco's HR team has claimed it's subsidizing the price of the gym, as well as other health facilities at the same site by 90 percent. So, what, the gym would actually cost $200/mo. at market rates? Must be some gym. Check it out in this video a Cisco source smuggled off-campus, and read Cisco's memo, which touts the loss of free gyms as bringing a "positive return on investment for Cisco." If you're feeling brave, crash the gym's grand opening on Monday.
A giant datacenter on 800 acres of land in Pryor, Oklahoma, won't start operating until 2010, Google spokesbots now say. The $600 million datacenter was supposed to open early next year, employing 100 people. Local and state officials had bent over backwards to attract Google to the site, even passing a law which made Google's energy bills private, lest competitors determine how efficiently it was running. (Photo by David Jones/GTR Newspapers)
Google's offices in Manhattan's Chelsea neighborhood are the latest to feel the pinch, with hours curtailed and snack service cut back, according to an internal memo. To understand what a shock to the system this is, remember how, when Google went public four years ago, cofounders Larry Page and Sergey Brin swore they would increase employee perks over time. Since then, Google PR has built the company's great-place-to-work reputation largely on its free meals. How fast things change: Just a year ago, the luxe perks of Google's New York office were a selling point, as the search engine courted the city's fashionistas. Now the food is just another cost to cut. Starving artists, don't count on mooching off free meals courtesy of your Googler friends: Google New York is also cracking down on guests. Here's the memo New York Googlers received Tuesday around lunchtime:
Food is at the center of Google's corporate culture, a sign of the company's Pollyanna worldview and the outsized financial success which enables this largesse. So why is Google is closing a café? Off The Grid, one of Google's 18 in-house eateries at its headquarters, abruptly shut its doors this week. Employees are being told the cut is "temporary," but workers are removing the café's fixtures, which suggests a permanent closure. What this means: Despite CEO Eric Schmidt's protestations, Google is being hit by the recession. And the blows are harder than the company has admitted to shareholders or employees.Off The Grid's closure is the harbinger of more cuts, a source within Google's kitchens we've nicknamed "Deep Fried" tells us. The building, 2350 Bayshore, is also having its "micro kitchen" snack stations closed. A large number of workers in the building were contractors, Deep Fried says, some of whom are losing their temporary jobs at Google. The closure also leaves a large area of Google's campus without breakfast service. Food is just one area where Google is slashing costs; under recently hired CFO Patrick Pichette, Google has been having a series of meetings about eliminating expenses, and Googlers have been implementing the cuts with the same slapdash speed with which it rolls out new websites. Google executives gave food-service operator Bon Appétit sharp budget cuts this year, which has only worsened the already troubled relationship between the companies. Google eliminated dinner at one café earlier this year. But the closure of Off The Grid was sudden, coming after a meeting between Bon Appétit executives and Derek Rupp, the café's executive chef, Deep Fried writes:
Is Yahoo cutting 3,000 jobs? 3,500 jobs? 1,500 jobs? Fifteen percent of its operating budgets? We're going with "none of the above." What Yahoo management is really tackling are Yahoo's out-of-control salaries and titles. Yahoo, an insider tells us, has relatively narrow pay bands for specific job titles. That means the best way to keep someone getting wooed by Google or a startup is to promote them. During the Microsoft takeover battle, Yahoo liberally tossed around raises to keep people, a source who tried to recruit people away from yahoo tells us. Add to that Yahoo's epic turnover, which has led to many battlefield promotions. The result: Yahoo has VPs who ought to be directors, directors who ought to be managers, and managers who shouldn't be, period. So what's the answer? A "hard reset," our source tells us — a massive bloodletting that will purge Yahoo of the overpaid and overtitled.
Patrick Pichette had an easy time of things in his new job as Google's CFO with his first quarterly earnings announcement last week. Part of the surprise Google delivered for investors was an unusually tight grip on expenses. Googlers, now the fun really starts. In an interview with Canadian Business, Pichette hinted at what was to come. His first soundbite was forgiving: "Everybody is going to expect the occasional 'oops' at Google, because we’re fast prototyping, we’re always changing." Then he got real:One of his priorities, Pichette said, "is pushing to make sure all the resources are used efficiently, that you feed the winners, starve the losers." In the land of free food, some projects are going to go hungry. Hey there, Google Knol: It looks like you could stand to have a good meal.
Elon Musk, the Tesla Motors investor who has freshly installed himself as the electric automaker's CEO, has explained his management coup and the company's pending layoffs in a blog post. Tesla's $47 million engineering center outside Detroit, near the automotive industry's biggest pool of technical brains? Gone. Tesla's much-anticipated Model S sedan? Delayed until the middle of 2011, at best; the company is ceasing all real activity that would lead to a car getting built. The $109,000 Roadsters customers have ordered? "I personally stand behind delivering a product that you will love," writes Musk. Musk has not yet enumerated how many of Tesla's employees will lose their jobs.
The Wall Street Journal snagged a copy of an email sent around the world's fourth-largest enterprise software company. I'm impressed that a firm with 50,000 employees and two CEOs managed to restrict its leaks to the Journal. Here's the raw email reconstructed from the Journal's blog post, which spends too much time framing and excerpting the missive. Notice how the story gets the awful irony out of the way first — SAP is freezing its own IT spending — then spells out a three-pronged plan that never once says "layoff."
Was Seth Sternberg, the CEO of Meebo, not in attendance at Sequoia Capital's recent summit for all of the venture capital firm's startups? In its now-famous "R.I.P. Good Times" presentation, Sequoia's partners scolded the entrepreneurs the firm has funded to cut all unnecessary costs. The online-chat startup's apparent response: Listing all of the free food and drink it buys employees. The one concession to frugality: They don't buy chocolate milk, because it's too expensive. (Chocolate soy milk, on the other hand, is deemed an affordable luxury.) Any bets on how long it will take for Sequoia's Roelof Botha, the lead partner on its Meebo investment, to tell Sternberg to stop paying the grocery bills? (Photo by ifindkarma)