8 ms·
Skype Fires Executives, Avoiding Payouts
- bugsy 15y agoI'm sure this won't result in any costly lawsuits.</skepticism>
- brudgers 15y agoTo keep this in perspective, Gurle, Dean and Gillespie were not long time employees from the startup days (all less than three years), Sunkara and Campa came on board this year through acquisition, and Brewsher, as head of marketing, was probably redundant in light of Microsoft's purchase.
- daemin 15y agoI'm wondering if this could be some mad-men-esque deal where the people fired really want to do their own thing? Get fired on purpose so that they're free to do their own company in the same space. Probably not but that's something that came to mind for me.
- Luyt 15y ago"Microsoft announced the Skype acquisition on May 10 and plans to connect it to Outlook e-mail, Xbox game console, Windows mobile phones and corporate-phone software." This is phase #1 of Microsoft's usual "embrace, extend, extinguish" strategy. Right now they embrace Skype and build it into some of their products. The next step will be to enhance the Skype protocol with extra Outlook and Windows Phone options; these protocols will be proprietary, patented and certainly not published. The final step will be to discontinue the Skype clients for OSX and Linux ('because their increasingly incompatibility with rich features the Windows platform offers Skype users'), update the protocol even further so that current Skype clients will stop functioning, and gradually remove the 'Skype' name and logo from their products, and eventually, from history. The idea is to disadvantage any competitors, and to make Skype users switch to Windows or a Windows phone.
- gaius 15y agoFUD, FUD, FUD and that's easy to prove: Hotmail on the Mac works just fine.
- gvnonor 15y agoAre you being sarcastic?
- lambda 15y agoThe Skype protocols are already proprietary and not published (I haven't checked if they're patented). It's not like Skype is an open standard or anything. This is one company that sells proprietary products buying another that sells proprietary products. Microsoft would be stupid to kill Mac and Linux support for Skype (perhaps they may kill just Linux support). The value in a communication technology is in how many people can use it; the more people who are on it, the more it attracts. If they start cutting people off, it will become far less appealing for anyone to use, and very easy for a competitor without such restrictions on their network to steal customers.
- ebaysucks 15y agoAmazing that this kind of behavior by Skype/Msft wasn't calculated in the contract at the time of signing it.
- fleitz 15y agoGurle used to work at MSFT IIRC.
- kenjackson 15y agoThis is pretty standard. If your options haven't vested and you're let go there usually isn't much you can do. I doubt MS has anything to do with it, except the fact that they probably didn't express any particular concern regarding the deal if these employees were let go.
- teej 15y agoThere's plenty they could have done before the contract was signed. They could have easily pushed for double trigger acceleration in their own contracts to prevent this.
- kenjackson 15y agoMy point is if they're planning on letting you go, they're not likely to bend over backwards to accommodate you.
- prostoalex 15y agoCompany's officers fiduciary duty is to protect interests of shareholders. Complicating contracts with the purpose of transferring that wealth from shareholders to executives could be construed as violation of that duty.
- cynicalkane 15y ago"Transferring wealth" isn't an abandonment of fiduciary duty, it's exactly what you do when you hire people and pay them. Nor is there anything wrong with negotiating contracts describing the details.
- djcapelis 15y agoGood for them. If you're going to be cutthroat dicks, be consistent. I hope their good employees take note.
- r00fus 15y agoReduction of equity stake after negotiated compensation just reeks of pure theft. So what are good employees supposed to do? Doubtless the ones who did not get diluted were the big money while the workers get shafted (as usual). Kleptocracy at it's finest.
- djcapelis 15y ago> So what are good employees supposed to do? Leave, if there's any justice in the world. This is how the market works. The reason you don't screw your employees like this is not just because you're a nice person, but because it costs you money in the long term.
- wnight 15y agoFunny how people thing this system could ever work. Companies are the original trolls, making up new accounts and coming back without any negative karma or legal responsibilities. As long as corporations are separate from the people running them it's a joke.
- cpeterso 15y ago> because it costs you money in the long term. And makes lots more in the short term. The long term never seems to arrive for companies' current executives.
- chernevik 15y agoAlas, market mechanisms aren't such great protectors here. They work best with large populations of similar events, where "average" behaviors can signal expectations and volatilities can be estimated on a fairly stable basis. Endgames offer the unethical opportunities to reap excess rewards without market penalties. Hopefully, there will be enough information to know just how screwed these people are (or aren't, I've seen gossip that several were late-comers) and the VC / executive players involved. It's possible that these decisions make some sense, but it sure looks bad at first glance.
- ary 15y agoStay classy Skype. I wish there was an alternative that matched Skype's previous good qualities (or better). The obfuscation of the OS X Skype client UI, plus the fact that they're now owned by Microsoft has cast a shadow on what used to be a great service (to me at least). Surely there is room in the market for a serious competitor.
- Corrado 15y agoDo any of these strike your fancy? * http://www.oovoo.com/home.aspx http://www.oovoo.com/home.aspx * http://tinychat.com/ http://tinychat.com/ * http://www.vbuzzer.com/conferencing/web_conferencing.php http://www.vbuzzer.com/conferencing/web_conferencing.php * http://www.goober.com/ http://www.goober.com/ * http://www.voxox.com/ http://www.voxox.com/
- ary 15y agoMaybe. Do you (or anyone else) have a preference?
- kidmen 15y agoFor webcaming, I've personally found ooVoo to have better quality than Skype.
- MortenK 15y agoI tried ooVoo recently as my significant other had problems getting Skype working. I must say I can't see it as a competitor to Skype. The UI is borderline unusable due to all the flashing ads. What's worse is my contact list of one got deleted, and it was impossible to re-add my GF. That was on day 2. A few days later, she was back on my contact list. I don't trust it, and it's a pain to use due to all the ads and the general UI.
- colinloretz 15y agoTinychat is the only one of these that doesn't sound like baby talk. Skype has done well and become a verb ("Skype me") and I don't see anyone asking to voxox, oovoo, or goober me anytime soon. There is a big gap out there for someone to offer a good quality, serious competitor.
- dstein 15y agoAnd who can blame them, it's just more of the 8 billion for the rest of them.
- adamfeldman 15y agoIs this typical and accepted behavior in a transaction like this?
- kenjackson 15y agoPretty common, rarely as blatant. Most commonly what you'll see is employees/founders who had vested but left the company early get screwed.
- beambot 15y agoWhat can a (startup) employee do to prevent these sort of situations from occurring after a liquidity event? In particular, what sort of terms should be in your hiring agreement -- eg. double trigger acceleration?
- meterplech 15y agoAs PG suggests: http://news.ycombinator.com/item?id=2672454.. http://news.ycombinator.com/item?id=2672454... the best thing you can do is work for a company where you trust the management team and the VC's that back them. An early stage investor would almost never do such a thing because it would completely damage their ability to get access to the best deals. Check thefunded.com for the VCs (and ask around as well) and do your best to work for good people who care about their employees and reputation.
- mrkurt 15y agoThis sounds like it was explicitly to get around the trigger clauses in the contract. They likely had acceleration for change of control, and fired people before the "event" that would have triggered that acceleration.
- shimon 15y agoDon't these contracts typically require termination with cause in order to interrupt vesting? Not that that's a perfect solution, but it should at least make these more blatant acts a bit easier to pursue in court.
- bediger 15y agoI bet that the "with cause" part would be pretty easy to find. Every company I've worked for that had official policies wrote them so vaguely and all encompassing that every single employee was in violation. Some of the "don't introduce 3rd party software to the network" policies, when read strictly, make every single developer who writes a small automation script a violator of the policy.
- Joakal 15y ago
- temp10238 15y agoTechnically this isn't Skype anymore. Skype management needed a cue from Microsoft.
- jordan0day 15y agoIt is still Skype (well, the private equity firm that owns Skype). The msft deal hasn't gone through yet.
- corin_ 15y agoWhile it is their call, and they will want to maximise profit from the sale, there's no chance that MS didn't sign off on this - think how pissed they could be. "We're buying your company and you just fired the executives that we wanted to keep running it?" I can only assume that it was decided as part of the sale negotiations. Whether it was Microsoft saying "we want to bring in a new team at the top" or the owners saying "we want to maximise profit" first, who knows.
- bugsy 15y agoI am not so sure that has been established. MS is not historically this sociopathic. It might be a pig in a poke deal. Pay for a company, get an empty bag. We'll know if this is the case if MS says "hey wait a minute" or not.
- pyre 15y agoThere's always a chance that it wasn't part of the deal, but that Microsoft won't care. If they feel that they are buying the tech, and not the team, then they might not object to this.
- corin_ 15y agoThe fact that they might not care doesn't change the fact that the sellers are extremely unlikely not to check if they care before firing everyone.
- pg 15y agoThe later the stage investor, the less they need to worry about their reputation with anyone except their LPs.
- dschobel 15y agoYeah but christ, is anyone going to want to take money from them after this? This is cut-throat by any standard...
- astrec 15y agoPE firms like this focus more on leveraged buyout than growth capital - the people taking their money are generally looking for an exit.
- redthrowaway 15y agoDoes this not hurt their future ability to invest in big name up-and-coming companies? If I'm the next facebook or twitter, these kind of shady practices would make me think twice about handing over a large share of my company to them. Can they only get away with it because their competitors engage in the same behaviour?
- sachinag 15y agoa16z was also a part of the group that did the Skype MBO; I'd be surprised if founders held it against them.
- random42 15y agoWhat is LP? Limited partners? (Apologies for ignorance)
- suking 15y agoyes - the people that give VCs $.
- meterplech 15y agoJust when I (and everyone else) was saying how horrible this is, I was shocked to find out the Google did something very similar to a Director of Operations named Brian Reid. They fired him 9 days before the IPO- leaving him with 119,000 unvested options at $.30 strike price. http://en.wikipedia.org/wiki/Brian_Reid_(computer_scientist) http://en.wikipedia.org/wiki/Brian_Reid_(computer_scientist)
- euroclydon 15y agoIf they're not vested, they're not vested. Maybe developers should strive for their delivery schedule to tightly coincide with their vesting schedule.
- gnosis 15y agohttps://secure.wikimedia.org/wikipedia/en/wiki/FYIFV https://secure.wikimedia.org/wikipedia/en/wiki/FYIFV
- nhangen 15y agoI hate to get spiritual here, but this is a major dose of bad karma, and I won't be surprised when shit hits the fan and something happens to these companies during, or after the deal. In the meantime, I'm looking for a way to get off of Skype. I wish Google would spend more time improving Google Voice and Google Chat. I wonder if Apple has plans to turn Facetime into a Skype alternative?
- drivingmenuts 15y agoWhoever designed the OS X Skype UI should have been first against the wall.
- jarrett 15y agoA lot of people have commented that this type of stuff is standard. Maybe that's true. But if I considered my stock options to be an important, must-have part of my compensation package, I'd demand contractual protections. Double triggers have been suggested; one could envision other safeguards as well. One way or another, I'd make sure that my options were safe in the event of my arbitrary termination. If I couldn't negotiate that, I'd base my negotiations on the assumption that the worst-case scenario would happen. In other words, I'd discount the value of my stock options accordingly when deciding whether the offered compensation package was adequate.