A new report published today at Business Insider details a "widespread pattern of executive misconduct," years after then new CEO Satya Nadella vowed to overhaul the company's toxic culture.
The report details allegations against three Microsoft executives or former executives: Alex Kipman, head of the HoloLens effort at Microsoft, former head of Windows Terry Myerson, and Tom Keane, an Azure executive who directed the $10 billion deal with the US Department of Defense. It also reveals an aversion to conflict by CEO Nadella, with a former executive Business Insider talked to characterizing Nadella's approach as "(w)hat's something we can do to make it go away without making hard decisions?"
In the report, BI details an incident with Kipman where in a management session that included women, the HoloLens exec demoed a Mixed Reality program in VR, watching on his headset as the others in the room saw what he saw on a nearby monitor:
In the video that filled the screen, several young women in skimpy clothing frolicked on a bed; an overtly sexualized pillow fight ensued. An employee who was present, speaking with Insider later, described the scene as "VR porn." The assembled staffers exchanged confused glances, and a couple of them walked out.
Kipman remains in his job, even after multiple other complaints of "inappropriate touching and comments."
For Terry Myerson, the complaints revolved around his abusive and belittling behavior:
But employees told Insider that there was a dark side to his tenure. A person who worked directly for Myerson for years said he was known throughout his career for "abusing, berating, and belittling" employees. Another person who worked closely with Myerson described him as "bullying, extremely abusive, angry."
Myerson enjoyed a protected status at the company for years, insiders said. But shortly before he left the company in early 2018, he "had a complete meltdown" backstage at a Microsoft event, according to a person who witnessed the incident. "He yelled at everyone and proceeded to berate them in a very public forum."
Myerson left the company shortly afterward, leaving on "great terms," but BI talked to three people familiar with the meltdown saying it "played a major role" in his departure.
The report goes on to detail the abusive behavior of another "golden boy" executive at Microsoft, Tom Keane, who reportedly "cut people down to pieces" for years:
"I've seen him reduce people to tears," the former executive said.
Two insiders say Keane earned the nickname "King Tom" because employees were expected to be at his "beck and call" and obey him without question, or suffer his wrath. "People have to say the right thing and kiss the ring for King Tom," one said.
Keane took an unexplained 30 day hiatus this January, and was reassigned a "special projects" role, but he still oversees hundreds of people, according to the report.
Microsoft is in the "beginning of the middle" of negotiations to complete a $68 billion acquisition of Activision Blizzard, a company with a reputation for an even more toxic culture. Some Microsoft employees have voiced dismay over the company's attempt to absorb the problems at Activision: "We can't even take care of our own house," one Microsoft employee told Insider. "And now we just bought one in worse condition."
Part of the terms of the deal with Activision initially said that CEO Bobby Kotick would assume a role at Microsoft, but a recent filing by Activision now says that his employment at Microsoft hasn't been finalized.
Microsoft has a lot of work to do to both address the problems detailed by Business Insider and those stemming from a look the other way culture led by Nadella, especially with the scrutiny that the Activision acquisition is sure to bring.