Report: Skype firing executives before Microsoft deal closes

While Skype's merger with Microsoft is not yet final it's getting close to becoming official. But before that happens it looks like the Internet phone company is firing some of its top executives. Bloomberg Businessweek reports via unnamed sources that Skype vice presidents David Gurle, Christopher Dean, Russ Shaw and Don Albert have all been fired from the company along with its chief marketing officer Doug Bewsher and its human relations head Anne Gillespie. Two more Skype executives, Ramu Sunkara and Allyson Campa, were also fired. They came from Skype's purchase earlier this year of Qik, a company that made a video conferencing software.

A Skype spokesperson admitted in a statement, "Skype, like any other pragmatic organization, constantly assesses its team structure to deliver its users the best products. As part of a recent internal shift, Skype has made some management changes.” All of these fired executives likely own stock in Skype but because they were fired before the Microsoft deal closed they won't receive as much compensation as they might have if they have stayed through the close of the merger.

As we have been reporting on for the past month, Microsoft announced its plans to purchase the Luxembourg-based Skype for $8.5 billion last May. Microsoft plans to make Skype into a division of the company and will integrate Skype into a number of its products including the Xbox 360 game console. Last Friday the Federal Trade Commission revealed that it has approved the merger between Microsoft and Skype which should close any day now.

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30 Comments

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If any of those execs were based in the UK, they can't be fired/made redundant/laid off/whatever as a result of an acquisition. If one company buys another then its employees are protected under the TUPE regulation.

Brian Miller said,
I wonder how much pressure M$ put on Skype to fire them...

I don't see why this is in the best interest of MS. They can always let them go after the acquisition. It smells much more like an illegal stock options grab by the Skype side of things to me.

Clearing a way for MS managers to create another "Microsoft Windows Live 2012 Video and Audio Communicator Home Edition" type of thing.

lexp said,
Clearing a way for MS managers to create another "Microsoft Windows Live 2012 Video and Audio Communicator Home Edition" type of thing.

Bahahahahaha! most funny joke of 2011, how original! /s

lexp said,
Clearing a way for MS managers to create another "Microsoft Windows Live 2012 Video and Audio Communicator Home Edition" type of thing.

They won't mess up the brand that is built up around Skype.. Plus that joke was old years ago. I agree just not original anymore..

polychromenz said,

Of course you can get laid off at exec level. Happens all the time

Yes, see my post above. This is VERY suspicious.

excalpius said,

Yes, see my post above. This is VERY suspicious.

If YOU know what they can and can't do, don't you think Skype corporate would know that as well? I am sure they have a legal team.

Tuishimi said,

If YOU know what they can and can't do, don't you think Skype corporate would know that as well? I am sure they have a legal team.

But contrary to "regular" employees " "Executives" should have more money to hire good lawyers, take the case in court........... and then settle out of the court.

Fritzly said,

But contrary to "regular" employees " "Executives" should have more money to hire good lawyers, take the case in court........... and then settle out of the court.

True.

Fritzly said,

But contrary to "regular" employees " "Executives" should have more money to hire good lawyers, take the case in court........... and then settle out of the court.

Lawyers are VERY expensive and executives who've just been laid off tend to hold onto their cash, for obvious reasons...especially during a recession. The companies often count on this when timing these actions.

No one does this scam on regular employees because they generally don't have vested/vesting stock options.

greenwizard88 said,
Why did Skype fire them? I don't get it...

In a company merger, redundant positions are always at risk. Skype would be brought into a division of Microsoft that may already have experienced people in charge. Instead of creating a second VP of Blahblah, you ditch the import and stick with the guy who already knows his way around Redmond.

You'll also find that people in, say, the human resources departments are also at risk, but the only people who would pity HR are people who've never dealt with HR.

/a fun interpretation of the whole process can be found on Hulu or Netflix by watching the 'Merger' episode of Dilbert
//synergy!!

greenwizard88 said,
Why did Skype fire them? I don't get it...

I suspect that it is because the company wanted to not have to pay these executives their stock options in the new company. Those options would therefore revert back to the owners, which suddenly get converted to the new MS offering and our worth a helluva lot more.

Unfortunately for Skype, it's actually illegal to do that. Since the merger/acquisition with MS is already announced, these execs are going to be able to sue for the value of those shares, etc.

This is the reason why they were "fired" instead of "laid off" - which is what you'd do if they were actually being removed as redundant. "Firing without cause" is a legal way of removing anyone in most states, and yet "firing" (usually only "for cause") can strip someone of their stock options, while being laid off usually does not.

Because of this loophole, it is often used as a stock theft dodge by unscrupulous companies. We'll have to see how this plays out, but the use of the term "firing" and the timing makes this action look VERY suspicious to me.

Joshie said,

In a company merger, redundant positions are always at risk. Skype would be brought into a division of Microsoft that may already have experienced people in charge. Instead of creating a second VP of Blahblah, you ditch the import and stick with the guy who already knows his way around Redmond.

You'll also find that people in, say, the human resources departments are also at risk, but the only people who would pity HR are people who've never dealt with HR.

/a fun interpretation of the whole process can be found on Hulu or Netflix by watching the 'Merger' episode of Dilbert
//synergy!!


Lol I just watched it, I'd upvote you if this was reddit!

Joshie said,

...
You'll also find that people in, say, the human resources departments are also at risk, but the only people who would pity HR are people who've never dealt with HR.
...

Love it. HR has far too much power in most organizations, and tends to be run by women who have more time than sense.

bb10 said,

If they weren't executives, I would have agreed with you.

+1; the executives were probably ****ty which resulted in the company being sold in the first place, so it was probably justified to fire 'em.

Coolaaron88 said,
Well thats despressing

-1. Most executives do is stuffing their pocket with stock holder's and the company money. Also, they constantly lay off other employees anyway. Karma is a bitch...

XIII said,

-1. Most executives do is stuffing their pocket with stock holder's and the company money. Also, they constantly lay off other employees anyway. Karma is a bitch...
Yup. Now let's see some of that Karma come and hit some fat cat US execs!

sonrah said,

+1; the executives were probably ****ty which resulted in the company being sold in the first place, so it was probably justified to fire 'em.


You don't know jack sh*t about business, do you?