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Skype riles execs with firings, fine print on stock options

microsoft-buys-skypeThe Department of Justice has officially approved Microsoft’s acquisition of Skype, but negative attention continues to plague the company. It felt like mere moments after the Federal Trade Commission gave its okay that Skype axed several of its top executives, seemingly trimming the company fat and getting rid of a handful of senior vice presidents — some of which had been with the company since its infancy. And what Skype passed off as a “management decision” is being looked at very differently by industry insiders. The general consensus is that Skype wanted to make as much off of the deal as possible, and investors saw an opportunity to maximize the company’s value.

Former employee Yee Lee wrote a personal blog entry explaining the inner workings of Skype. Lee was among the recently terminated employees let go in the wake of the Microsoft deal. He says compensation and stock policies were “very heavily tilted in the owners’ favor and against the employees.” He further says that the company is able to “‘repurchase’ any vested shares for anyone who leaves the company voluntarily or is terminated with cause.” Worse yet, the company gets them back for their original price – not what they are now worth. Considering Skype’s success, this could be a very significant difference.

There’s nothing illegal about this clause, but what is getting a rise is that it appears Skype wasn’t exactly clear about it. Generally, employees expect to be paid more during their time at the company when they know that when they leave they aren’t going to get any sizable parting gifts. The employees’ obvious and open shock at what’s happening doesn’t speak well of Skype’s intentions.

Skype, of course, has defended itself against the onslaught of bad press resulting from the firings. The company’s official statement continues to stand by the fact that it had just cause to terminate the positions of those fired. While there’s been a considerable amount of Skype bad mouthing, some are also rushing to the company’s defense, attributing the situation to being a by-product of large corporate mergers and acquisitions. There’s also the defense that Silver Lake, the group which Skype was born out of, has a history of internal restructuring, something that carried over into Skype’s own personnel procedures.

In reality, it sounds like Skype and its board ran thick with internal disagreement. Perhaps all of this is so surprising for bystanders because Skype has been such a successful and important company, but it looks as if it were a duck on water: Everything smooth and calm on the surface, while underneath it’s furiously paddling to keep things looking that way. When long-struggling companies fire mass amounts of staff, it’s newsworthy but almost unsurprising. Nokia’s own deal with Microsoft was preempted and followed by serious job cuts, but the corporation’s market status has been so volatile that this wasn’t exactly a shock. This simply wasn’t true in Skype’s case, and this is only in addition to that fact that several very important employees — high-ranking ones that we can assume held a great deal of Skype stock — were fired and all signs seem to point to little more than corporate greed.

No one expects a giant corporation to have a clean white slate when it comes to business matters of this magnitude, but if Skype’s implied deceit is the cause of its “restructuring,” then it deserves the attention it’s getting.

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Molly McHugh
Former Digital Trends Contributor
Before coming to Digital Trends, Molly worked as a freelance writer, occasional photographer, and general technical lackey…
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