Ex-Microsoft Exec Used Epstein to Negotiate Exit
▼ Summary
– Former Microsoft executive Steven Sinofsky sought Jeffrey Epstein’s advice during his 2012 exit negotiations, forwarding confidential emails and later paying him for his assistance.
– Sinofsky warned internally that the Surface RT tablet launch was failing catastrophically, with sales far below projections, shortly before his departure from Microsoft.
– Sinofsky negotiated a $14 million exit settlement with Microsoft over months, advised by Epstein to push for $20 million, with terms restricting his public criticism of the company.
– During his job search, Sinofsky, with Epstein’s involvement, met with Samsung and Apple’s Tim Cook, discussing roles including software competition with Google.
– Microsoft took a $900 million writedown on Surface RT inventory in mid-2013, shortly after finalizing Sinofsky’s settlement, due to massive overproduction and poor sales.
Newly released correspondence reveals that a former high-ranking Microsoft executive sought guidance from Jeffrey Epstein during a critical career transition. The emails, made public by the Justice Department, indicate Steven Sinofsky, the former head of Windows, frequently consulted Epstein while negotiating his unexpected departure from Microsoft in late 2012. The communications suggest Sinofsky forwarded confidential company emails to Epstein in near real-time and later paid him for his assistance, while also seeking his help to secure a new position at rivals like Apple or Samsung.
One notable email chain shows Sinofsky forwarded a confidential internal message to Epstein in July 2013. This message detailed severe problems with the launch of the Surface RT tablet, warning the product was “about to catastrophically fail in a very public way.” Originally sent to then-CEO Steve Ballmer in November 2012, Sinofsky’s email stated Surface RT sales were in a “very tough spot” and Microsoft risked an “unrecoverable situation.” He left the company just days after this correspondence with Ballmer.
Microsoft had placed a major bet on the Arm-powered Surface RT as an iPad competitor, alongside the touch-centric Windows 8 interface. The company anticipated 70 percent of sales would occur online. Sinofsky’s email, however, disclosed “significant problems” with online tablet sales and noted Microsoft had manufactured far more units than it could sell. In the same message to Epstein, Sinofsky pitched a plan to expand Microsoft’s retail presence internationally, based on data showing customers wanted to try the device in stores first, a proposal that reportedly surprised both Ballmer and former COO Kevin Turner. Following days of internal debate over the Surface RT’s struggles, Microsoft announced Sinofsky’s departure a week later.
While initial reports attributed his exit to a personality clash, the emails point to a protracted and difficult separation. Sinofsky apparently enlisted Epstein to help broker his exit package, engaging in months of negotiations that ultimately yielded a $14 million “retirement” settlement. It remains unclear why Sinofsky sought advice from Epstein, who had been charged with sex trafficking minors four years prior. The two had previously discussed Internet Explorer 9 in 2011, and Sinofsky’s longtime partner, Dr. Melanie S. Walker, had worked as Epstein’s science adviser in the late 1990s.
When questioned about his decision to consult a registered sex offender, Sinofsky initially declined to comment before referring inquiries to a crisis management communications firm. The firm also declined to provide an on-the-record statement. Microsoft has similarly declined to comment.
The correspondence further reveals that after Sinofsky’s departure, an individual using the nickname “poops” alerted Epstein that Sinofsky had “sent several mails that he is going to kill himself.” This followed scrutiny over his new role teaching at Harvard Business School, which raised further questions about his Microsoft exit. Sinofsky expressed distress over perceptions he was fired. Months later, he emailed Epstein concerns that his settlement might still give that impression.
Initially, Microsoft offered $5 million for a non-compete agreement. However, according to an email from Sinofsky’s executive compensation lawyer, the company was willing to pay more if Sinofsky agreed not to “communicate with Microsoft employees regarding compensation, business strategy, and certain other matters.” Microsoft also sought to prevent him from ever publishing “any information regarding Microsoft that they consider unpleasant.”
Epstein advised Sinofsky to push for a $20 million settlement, leading to protracted negotiations until a $14 million agreement was reached in July 2013. During this period, Sinofsky speculated Microsoft feared he would recruit Windows team members or that Ballmer was blaming him for Windows 8’s issues. At one point, he told Epstein that Microsoft was contacting reporters to ask if they had recently spoken with him.
In the months leading to the finalized deal, Sinofsky and Epstein exchanged numerous emails, organized calls, and met for meals and meetings. Sinofsky shared details of job discussions with Samsung, which was exploring creating its own software to compete with Google, and with Apple CEO Tim Cook. Epstein appears to have arranged a meeting with Cook, who was initially concerned Sinofsky might be starting a company with ousted Apple executive Scott Forstall. Sinofsky and Cook eventually spoke in May 2013, agreeing to stay in touch about future opportunities.
The settlement process agitated both parties. Microsoft was displeased with Sinofsky’s blog posts, while Sinofsky described Microsoft’s behavior as “crazy” in a June 2013 email to Epstein. He was eager to discuss his Microsoft tenure and sought Epstein’s advice on handling media inquiries.
After the settlement was publicly announced on July 3, 2013, Sinofsky described himself as a “good ex wife” in an email to Epstein. Microsoft transferred the funds months later, prompting Sinofsky to write, “Got paid. You will be too :)” in a September 2013 message.
Shortly after announcing Sinofsky’s settlement, Microsoft disclosed a $900 million writedown on Surface RT inventory in July 2013. The company attributed the loss to “inventory adjustments,” having produced an estimated 3 to 5 million Surface tablets during the holiday quarter but selling just over 1 million Surface RT devices.
(Source: The Verge)