Skype Culls Management Ahead Of Microsoft Deal

Skype has confirmed that a management cull has begun as the US trade regulator has approved Microsoft’s acquisition of Skype.

Microsoft has bought Luxembourg-based Skype for $8.5 billion (£5bn) from investor group Silver Lake, which teamed up with Index Ventures, Andreessen Horowitz Ventures, and the Canada Pension Plan (CPP) to purchase a  majority stake in Skype in December 2009 from then owner eBay.

Late last week Microsoft’s acquisition of Skype was given the green light by US authorities after the US Federal Trade Commission officially approved the deal.

Executive Cull

The deal enables Microsoft to increase its support for web calling in its Lync communications server, and its Windows Phone mobile OS, as well as compete better against Google and Facebook in social networking.

Under the terms of the deal, Skype CEO Tony Bates will become president of Microsoft’s voice division.

But other members of his management team are not so fortunate, when it emerged that Skype was terminating the services of a number of senior level executives.

Vice presidents David Gurle, Christopher Dean, Russ Shaw and Don Albert have apparently been dismissed from Skype. Bloomberg, quoting three people familiar with the matter, said that the move has been designed to reduce the value of their payout following the Microsoft deal.

It also reported that chief marketing officer Doug Bewsher, as well as  head of human resources Anne Gillespie, had also had their services terminated.

And executives Ramu Sunkara and Allyson Campa, who joined Skype after it acquired mobile video specialist Qik in January, were also let go.

Smaller Payouts?

According to Bloomberg sources, the timing of the dismissals means stock options will be worth less than if the executives stayed until the closing of the $8.5 billion deal.

Traditionally when a company is acquired, executives are given valuable stock options, and their level of compensation is usually tied to the purchase price of the acquired company. By firing executives early it seems Microsoft can reduce the level of compensation it will have to pay.

Skype meanwhile confirmed the management changes, but refused to name those involved.

Skype Statement

“”Skype, like any other pragmatic organisation, 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,” Skype told eWEEK Europe UK in an emailed statement.

Reports of the departures first emerged last Wednesday when the Skype Journal, a blog that tracks Skype, reported that a number of executives had left the company.

Earlier this month, Skype and US communications giant Comcast announced a partnership that will let Comcast customers make and accept HD video calls through their television sets.