For Skypers, First the Party, Then the Job Cuts

10 Comments

Almost 10 days ago, Niklas Zennstrom, the co-founder of Skype, threw a party to remember at London’s swanky The Cuckoo Club. The nightclub, which is normally the haunt of Prince Harry and his brother and the rest of the jet set, played host to Skypers — both current and past — including co-founder Janus Friis. Unfortunately, after the party came the hangover.

It is rumored that nearly 30 Skype employees — mostly in the London office, but also some in Estonia, came back from the weekend to find pink slips waiting for them. I am told that most of the folks who were cut were from the marketing side of the business. We have emailed Skype PR to get an update/confirmation on the news of job cuts. It is cruel to say, not a very merry Christmas for those who have been nudged out.

Several senior executives had already quit the company. On Oct. 1, Zennstrom announced that he was resigning as CEO and Skype took an impairment charge of about $1.43 billion.

Skype recently made the wrong kind of headlines when it pulled a switcheroo on some of its London-based SkypeIn customers. eBay has been trying to rationalize the Skype’s operations and at the same time trying to figure out what to do with its ultra-popular but not quite profitable P2P voice service. Google was rumored to be interested in Skype, but we haven’t heard anything at all.

10 Comments

Phil Wolff

Aside from holiday timing this just seems like a 5% adjustment.

“Why?” is a more interesting question.

“Why now?”

“Why marketing?”

michaelportent

I’d love it if Google nabbed Skype. Maybe they could fix the darn thing so that people “skyping” in to the podcasts that I’m a part of don’t sound like robots half the time.

Sebastian Moser

@Johnson
“not quite profitable” doesn’t mean “profitable”.
Skype is profitable, but the ROI in the investment isn’t nearly acceptable for eBay ;)

Johnson

Om, for your info, Skype is profitable and has been for some time.

Noclegi Polsce

I think that how Skype treated it workers is dishonest. How could they deprive people of their work just before Christmas? The fact that they are giving workers up is natural. Companies are searching for the reduction in costs, so workstations are being reduced. However, they should have warned them about it. I am indignant at this fact. So far I regarded Skype as a respectable company. I changed my mind.

Toti Stefansson

It is never a good time.
However, remember that this is in Europe. Over here you get pretty decent severance packages, for instance if you’re let go before the first of December – which seems to be the case here – you have up to 3 months notice, where they have to pay you, but can ask you not to show up.
Plus vacation time earned (4 weeks per year), which they cannot force you to take in mid-winter.
So as nasty as it seems to be let go just before the holidays, this does not mean no presents for the kids or no food on the table.
Plus, since summers are usually slow in Europe, due to vacations, it is much easier to find a job during two periods of the year: Sept-October on one hand and January-April on the other hand. Pretty much nothing happens between mid-June and late-August, so you don’t want to have the new guy settling in during that period.

Paul

What’s wrong with companies that fire people during the winter holidays? We all understand quarterly reporting obligations, but couldn’t these companies just reserve for terminations in calendar Q4 and then let people go in January?

It seems thoughtlessly cruel to let people go at this time of the year.

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