From: Linda (joelinda1@home.com)
Date: Tue Aug 29 2000 - 20:58:50 PDT
["...Michael Saylor will give $10,000 of stock from his
personal holdings to each departing employee."]
http://interactive.wsj.com/articles/SB967502678567820619.htm
August 29, 2000
Troubled MicroStrategy Dumps Cruises,
Other Lavish Worker Perks to Cut Costs
By JULIA ANGWIN
Staff Reporter of THE WALL STREET JOURNAL
The party is over at MicroStrategy Inc., literally.
As part of a cost-cutting move, the struggling
Vienna, Va., software firm will no longer take all
2,300 employees on annual Caribbean cruises or fly
workers' friends and family to Virginia for annual
company visits.
Also, the company announced it will lay off 10% of
its work force in a move the company says will
save $25 million annually. A person close to the
restructuring said founder and Chief Executive
Michael Saylor will give $10,000 of stock from his
personal holdings to each departing employee.
Mr. Saylor declined to comment on his offer.
Although the offer could cost Mr. Saylor more than
$2 million, it is but a blip in comparison with his
$1.2 billion of holdings in MicroStrategy. Analysts
said the move was typical of the CEO, who is
famous for his parties and other efforts on the
behalf of employees.
"It is a goodwill gesture on his part, and I think it
is admirable," David Hilal, senior analyst at
Friedman, Billings, Ramsey & Co., said. "This is a very
hard decision for him."
Mr. Saylor said the company will also end the
practice of individually negotiating prices for its
data-management software with customers and begin
posting price lists on its Web site. He said he
hopes the practice will free up sales agents to do
more selling and less "wheeling and dealing."
"I think investors are expecting us to take some
difficult medicine here," Mr. Saylor said. MicroStrategy
has been struggling since March 20, when the firm said
it would restate revenue and that its accounting practices
were being questioned by the Securities and Exchange
Commission. The inquiry is still pending.
MicroStrategy's share price has plunged from a high
of $333 March 10 to $27.50 Monday, up 63 cents in 4 p.m.
Nasdaq Stock Market trading.
Mr. Saylor said the company is attempting to change
in order to reach profitability. As part of that, he
said it is no longer practical to hold parties
for all the employees. "At the point that we have
5,000 people in a stadium, the culture starts to look
more like the Grateful Dead and a lot less like the
Waltons," he said.
Earlier this month, the company rescinded offers made
to 236 college graduates and others who had accepted
offers to work at MicroStrategy. "We think in retrospect
[that] we overhired," Mr. Saylor said, referring to
the combined job cuts.
Mr. Saylor emphasized that no layoffs will come from
sales staff. Rather, he said, the cuts will come from
marketing, administration, corporate development,
recruiting and some professional services. All employees
will be offered at least four weeks of severance pay.
This archive was generated by hypermail 2b29 : Tue Aug 29 2000 - 21:00:49 PDT