Seattle Bubble

News & discussion about real estate & the housing bubble in the Seattle area.

Seattle Bubble - News & discussion about real estate & the housing bubble in the Seattle area.

Entries Tagged as 'Microsoft'

Boeing Still by Far the Biggest Player in the Puget Sound Economy

By The Tim on October 28th, 2009 at 1:30 PM · 111 Comments

Quick note on the potential impact of a long-term departure of Boeing from the Puget Sound.

The Seattle-area economy is definitely more diverse than it was in the ’70s, but Boeing still dominates the employment base by the numbers.

A 2003 table from the Greater Seattle Chamber of Commerce shows Boeing employing more people than the next six-largest Puget Sound companies combined (Port of Seattle, Alaska Air, Microsoft, UW, Safeway, and the VA).

Here’s a crude visual of the size of Puget Sound’s top 10 employers based on the Chamber’s 2003 data linked above:

Top 10 Puget Sound Employers (2003)

Here is some more recent data on Boeing, Microsoft, and Amazon (which was listed by the Chamber of Commerce as the 9th-largest local employer as of 2003).

Total Puget Sound Jobs
Boeing: 73,357 (46% of total headcount)
Microsoft: 40,224 (44% of total headcount)
Amazon: 10,850 (assuming 50% of total headcount)

And keep in mind that the numbers listed above are only those directly employed by Boeing itself. Many thousands more local jobs are directly tied to Boeing in companies that supply Boeing with parts and services.

In short, there’s clearly a lot at stake for the local economy (and by extension the local housing market) when it comes to Boeing’s long-term plans.

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Official Word on Microsoft Layoffs: 1,400 Now, 5,000 Total

By The Tim on January 22nd, 2009 at 6:48 AM · 218 Comments

Here’s the official word on the long-rumored layoffs at Microsoft, courtesy Todd Bishop at TechFlash:

Microsoft this morning announced earnings well below its previous estimates and said it will be cutting 5,000 jobs over the next 18 months to adjust to the new economic reality, including 1,400 positions today. The company isn’t saying how many of the cuts will come in the Seattle region.

The company said in a news release that the cuts will be made across research and development, marketing, sales, finance, legal, human resources and the information-technology department. As part of the announcement, the company took the unusual step of withdrawing its previous earnings forecast, saying it can’t predict results accurately because of market volatility.

For the record, 5,000 jobs would be roughly 5.5% of their latest-reported headcount of 91,259.

Update: Mike Simonsen of real estate research firm Altos Research has a brief post up on his blog about how he feels the MS layoffs will effect the Seattle real estate market.

You’re watching the last leg of the stool being kicked out. The tech industry held out longer than most this time around. In the first half of 2008 many of the highly compensated and generally well-financed people in the tech industry were keeping prices steady in the most desirable neighborhoods of the Bay Area and Seattle (notably waterfront properties). Then as the stock markets declined in the second half of the year, we lost a lot of down-payment money. Finally this crew is now worried about basic monthly income.

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More Signs of Shrinkage at Microsoft?

By The Tim on January 8th, 2009 at 2:42 PM · 26 Comments

A couple more notes on Microsoft before we get to our big year-in-review / 2009 forecast post tomorrow.

First off, for those that didn’t catch it, this is worth mentioning: Microsoft forgoes South Lake Union lease

Microsoft Corp. has put on hold any interest in further expanding its operations in Seattle because of the deteriorating economy, a spokesman said Tuesday.

For months, the company had been considered to be in the market for additional real estate in the city, and Microsoft had been in negotiations to lease all 300,000 square feet of office space at 2201 Westlake, a mixed-use development under construction at the southwest corner of Westlake Avenue North and Denny Way.

But spokesman Lou Gellos said in a statement that the company “decided not to continue negotiations because of the (national) economic situation and the changing market conditions.”

The loss for now of Microsoft as a potential tenant will put additional downward pressure on office rental rates in Seattle, according to Kip Spencer, the co-founder of OfficeSpace.com and an executive at JE Dunn Construction Co.

2009 looks to be a great year to get a steal on downtown and South Lake Union office rents, if your company is looking to move or expand. Tons of supply with rapidly shrinking demand = great deals, just like residential real estate. Go figure.

Also, revisiting the whole layoffs rumor, I thought I would share this tip from an anonymous Microsoft insider:

…there will indeed be some layoffs at Microsoft, but not nearly to the degree of the rumors we’re heard so far. It will be more along the lines of the standard “repurposing” of jobs they do periodically, and some much needed belt tightening. … Personally, I wouldn’t be surprised if MSN, Windows Mobile, or Internet Explorer got some deep cuts, but that’s just my opinion – nothing was specifically said about them from my manager.

That sounds pretty much along the lines of the less sensationalist reports we’ve been reading elsewhere, and sounds more believable. Also, for what it’s worth, I know that some departments at MS are actually still hiring, because a friend of mine has an interview with the Xbox group this week.

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Pre-Weekend Potpourri: Microsoft Layoffs, Foreclosure Aid, Downfall

By The Tim on January 2nd, 2009 at 12:02 PM · 27 Comments

It’s a pretty slow news day today, what with most people still taking time off for the new year. So I thought this would be a good time to throw a bunch of smaller stories together into one post.

First off, let’s hit a topic that has been on a lot of people’s minds lately: Microsoft layoffs. An excellent post today on TechFlash from top MS-watcher Todd Bishop sums up the situation well:

Speculation about possible layoffs at Microsoft has been swirling for weeks now in the Seattle tech community and online. We’ve been digging for information on this for a while, talking to people inside Microsoft and others familiar the company. But so far, at least, we haven’t been able to get any reliable information or direct confirmation.

That doesn’t necessarily mean layoffs aren’t coming. We’re continuing to dig, and we welcome any and all tips. But it’s worth noting that none of the online reports so far seem to be based on first-hand knowledge.
…
If the company reduces its workforce, Microsoft’s contractors and vendors could be among the most vulnerable. The company doesn’t report those workers as part of its employment numbers, so the cutbacks wouldn’t be as public. The Seattle Times’ Ben Romano reported this week that he’s “heard from a handful of contractors whose contracts at Microsoft were abruptly cut short.”

In the end, Microsoft may try to cut expenses through something more nuanced than a huge layoff.

Next up, we’ve got P-I columnist Bill Virgin (who we have been a long-time fan of here at Seattle Bubble) almost kindof calling for a bottom in housing in 2009:

With so much bad economic news about so many sectors crammed into the fourth quarter of 2008, it’s easy to forget that in housing, the bad news started way back in 2007. Plunging housing starts, rising defaults and foreclosures, falling prices on existing-home sales — those reports have become almost routine by now.

As with banks, we’re now looking for the “some point” at which those trends lose steam. Just the length of housing’s decline would suggest that the sector’s forest fire (yes, we’re switching metaphors from our earlier water theme) has consumed most of the available kindling.

I think Bill’s “forest fire” analogy is a pretty good one, because whenever the fire finally does go out, it will take many, many years to see any significant regrowth of the “forest.”

Also interesting was this short AP blurb about foreclosure assistance heading to Washington State:

Washington will receive $28 million in federal home foreclosure aid.
…
The money will help local jurisdictions buy foreclosed homes, fix them up and resell them to low- and moderate-income buyers. The funds also may be used in down-payment assistance programs.

That actually sounds like a reasonable use of the money. Rather than pouring my taxpayer dollars into futile attempts to keep people in homes they should have never bought in the first place, we can let the foreclosure process take its natural course and help facilitate a move toward actual affordable housing.

…and finally, so maybe people will stop posting this over and over again in the forums and the comments, I’m front-paging this amusing video some clever chap put together using the “Downfall” captioning meme. Enjoy.

(Todd Bishop, TechFlash, 01.02.2009)
(Bill Virgin, Seattle P-I, 12.31.2008)
(Associated Press, Seattle P-I, 12.30.2008)

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Weekend Roundup: 1873, Hiring Freeze, Un-Sale…

By The Tim on October 4th, 2008 at 1:41 PM · 58 Comments

Here’s a brief roundup of a bunch of noteworthy items that have popped into my inbox and RSS feeds in the last day or two.

Aubrey Cohen: Current economic woes more like 1873 than 1929.

“When commentators invoke 1929, I am dubious,” writes Scott Reynolds Nelson, a professor of history at the College of William and Mary. “According to most historians and economists, that depression had more to do with overlarge factory inventories, a stock-market crash, and Germany’s inability to pay back war debts, which then led to continuing strain on British gold reserves. None of those factors is really an issue now.”

Nelson continues: “In fact, the current economic woes look a lot like what my 96-year-old grandmother still calls ‘the real Great Depression.’ She pinched pennies in the 1930s, but she says that times were not nearly so bad as the depression her grandparents went through. That crash came in 1873 and lasted more than four years.”

Noted.

Seattle Times: Microsoft hiring plans to face “adjustment” as tech spending slows

Microsoft confirmed Friday it’s re-evaluating its current hiring plans and “will make some adjustments as appropriate.”

Those adjustments are likely to be downward, given Chief Executive Steve Ballmer’s recent comments about Microsoft being affected by the economic slowdown.

Although the company still intends to keep growing, any reductions are unsettling for a region reeling from the fire sale of Washington Mutual, the sale of Safeco, a Boeing strike and a sputtering housing market.

Seattle Times real estate blogger Cindy Zetts shares some recent meandering excerpts from her blog, in which she appears to be trying to spin today’s market positively.

Aubrey Cohen also gives a good outline of what the local foreclosure auction scene looks like today.

That’s the foreclosure auction scene these days: lots of houses for sale, lots of cautious investors and an increasing number of civilians who think it might be a good place to get a home at a bargain price.

And lastly, Mr. Cohen again, who points out in his blog that local real estate broker Coldwell Banker Bain is thumbing their nose at the national Coldwell Banker office, declining to participate in the 10% off “10-Day Sales Event.”

“While I appreciate the effort to ‘make something happen’ relative to the more adversely affected markets in the U.S., we strongly feel the ‘retail’ mindset of this promotion is not appropriate,” Ron Sparks, managing vice president Coldwell Banker Bain, said via e-mail. “Homes are unique, and each brings a nuanced value proposition to the market. We do our very best to properly price our listings every day.”

In other words, “Seattle is special. Homes here are worth whatever we say they’re worth, and these stubborn buyers just need to deal with it.”

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Boeing & Microsoft Holding Up the Market?

By The Tim on March 4th, 2008 at 11:37 AM · 56 Comments

Here’s a thread to discuss some of the not-so-great big news that has come out recently for the Seattle-area’s two biggest private employers.

Boeing:

Microsoft:

Not exactly a heaping helping of good times for the area’s two flagship employers, frequently touted as having the fortitude to maintain the local housing market entirely under their own economic power.

What are your thoughts about how Boeing and Microsoft are doing, and what effect it will have on people buying and selling houses?

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