5 Companies That Had A Rough Week1:31 PM EST Fri. Sep. 20, 2013
Companies that have had a rough week include news of impending layoffs at BlackBerry, poor customer satisfaction scores for the desktop PC industry, a major software developer that owes $13 million in back taxes and Microsoft's loss of a key executive.
The news just keeps getting worse at BlackBerry. This week The Wall Street Journal reported that the Waterloo, Ontario-based mobile device maker is preparing to lay off up to 40 percent of its staff in order to cut costs. The report said the cuts would be widespread throughout the company.
BlackBerry, which has 12,700 employees, has been struggling to turn itself around in the face of punishing competition from Apple's iPhone and Android-based smartphones. The latest news follows reports that the company has put itself up for sale with the goal of being acquired as soon as November.
Jeff Sandquist, Microsoft's senior director of developer relationships, is leaving the company at a time when the software giant can least afford any decline in relationships with its ISV partners.
Sandquist disclosed this week that he's leaving Microsoft after 16 years to join Twitter, where he'll be working with the social media company's ecosystem partners.
Microsoft is struggling to gain market traction for its Surface tablet devices, for smartphones based on its Windows 8 Phone mobile operating system, and even for Windows 8 itself. Having a big stable of third-party applications is a critical part of those efforts and losing Sandquist could make that challenge even greater.
IT management software vendor BMC has to cough up $13 million in back taxes and penalties after it lost a case in tax court this week concerning profits earned abroad.
The case revolved around a 2004 corporate income tax repatriation holiday that allowed multinational companies a tax break on profits returned to the U.S., reducing the rate temporarily from 35 percent to 5.25 percent. Between June 29, 2005, and March 31, 2006, BMC repatriated $721 million from its European counterpart.
The conflict arose between the corporate income tax break and issues over transfer pricing that questioned the amount of profits BMC held domestically. The transfer put BMC's profits higher, meaning it owed more taxes. BMC challenged the difference, but a tax court ruled Wednesday that it must pay $13 million in missed taxes and penalties.
Earlier this month, BMC became a private company when Bain Capital and Golden Gate Capital acquired it for approximately $6.9 billion.
Microsoft pulled a series of tongue-in-cheek Apple-bashing videos this week after a backlash from online viewers.
One of the videos, posted last week, depicts two overeager Apple designers pitching the iPhone 5C and iPhone 5S to Apple CEO Tim Cook and Design Chief Jony Ive. In the video, the Apple designers poke fun at the plastic casing of the iPhone 5C and the new gold iPhone 5S model. One even sneaks in a jab at Apple's long-rumored "iWatch" being sent back to the R&D labs. The video shows Cook and Ive from behind, so their faces aren't seen. But, some YouTube viewers felt the Cook depiction was in poor taste because it bears a strong resemblance to the late Steve Jobs.
Microsoft isn't saying why it pulled the video, but a spokesperson told CRN it was meant to be a joke. "The video was intended to be a lighthearted poke at our friends from Cupertino. But it was off the mark, and we’ve decided to pull it down," a Microsoft spokesperson said in an email.
Consumer satisfaction with the PC industry is spiraling downward along with PC sales, according to survey results released this week by the American Customer Satisfaction Index.
The survey showed that users of desktop PCs had big gripes with vendor call centers, and with the processor speeds and operating systems of the PCs themselves. But consumers were relatively satisfied with PC design, accessory availability and the number of applications available for their PCs.
Apple and Hewlett-Packard both bucked the trend by registering gains in customer satisfaction for their desktop products compared to 2013. But Dell's score was down this year.