Layoffs are bad enough as they are. Lives are disrupted, plans forced to change, careers stalled, years of work lost with nothing to show for it. Microsoft andXbox’s many rounds of layoffs over the last few years have impacted thousands of people, suddenly severing their sources of income and forcing them to look elsewhere for jobs, perhaps even having to uproot their lives and those of their families to relocate, but this is now a mundane kind of tragedy. Everywhere in the industry, not just at Xbox, people suddenly lose their jobs and are forced to scramble for purchase.
Many Xbox Employees Also Lost Their Stocks
But it seems that it’s particularly painful to be fired from a big tech company like Xbox. For the unfamiliar, one of the big perks of working at a multinational company, especially those in tech, is the stock you get. You’ll see this at companies like Google, as well. Employees are told when they’re hired that they’ll receive shares as bonuses – if the company does well, your shares go up in value, and you can sell them whenever you want to get yourself some extra money.
However, these shares aren’t just handed to you right off the bat, because you don’t have an incentive to stay with the company in the long term. These shares are usually unvested, and are vested on a schedule determined by the company. This means you might get a portion of those shares after every year with the company, meaning that the longer you stay, the more shares you get.
But according toa LinkedIn postfrom former Xbox employee Noble Smith, Xbox doesn’t pay royalties to its developers. Smith says, “Executives like Matt Booty tell Xbox workers in company meetings (whenever he is asked if Xbox will someday pay out royalties) that your royalty equivalents are the stock shares that you are granted at your signing and any stock shares granted as bonuses.”
So employees are getting screwed over by not getting royalty payments. But it gets worse. When you’re laid off from Microsoft (and presumably many tech companies), your unvested stock is returned to Microsoft. Depending on how the company is doing in the stock market, this could be a huge amount of money – Smith says that the unvested stock he lost when he was laid off from Xbox was “enough to put my kids through college”. With thousands of people laid off, all that promised money goes back to the company.
Microsoft Is Taking Money Back From Its Employees
This isn’t a Microsoft-specific problem – it’s common practice with any company that offers stock vesting as a hiring incentive. Some companies will vest the rest of your shares as a gesture of goodwill as part of your severance package, but let’s be real, most companies aren’t going to do that.
It’s an incredibly scummy practice. The people laid off aren’t able to vest the rest of their shares, not out of their own choice, but because the company they work for fired them. The people who made the stock more valuable are left without their stock (including what they got for yearly performance bonuses!), while the company collects those shares and reabsorbs the wealth.
Microsoft stock has climbed to an all-time high over the last two months, likely buoyed by news of layoffs and a heavy investment in the company’s AI tech.
It’s hard to say how much money Microsoft has recouped from its employees, not just through their salaries, but through the stocks they were promised. It’s a wider problem in the industry, but the scale of Microsoft’s layoffs is amplified because of the consolidation the corporation has undertaken over the last few years. This is not a matter of a couple of hundreds of thousands of dollars – it is hundreds of millions of dollars worth of stock taken from employees while the stock is at an all-time high.
