Microsoft to Cut 5,000 Jobs
PC megalith Microsoft is not immune to the dank economy. At the close of market today, Microsoft has announced 1,400 immediate layoffs, with up to 5,000 jobs cut over the next 18 months..
Earlier predictions called for layoffs of 10% of total staff across multiple divisions, but we don't know if that scenario will come to pass. However, layoffs there shall be, according to Steve Ballmer's all-staff email (see below). Redmond is definitely hurting: as PC sales slow, so do sales of Windows software.
Aside from PC users switching to other operating systems, it's also a matter of people just not replacing their existing machines.
In a further sign of just how rough the economy is, Microsoft is also expected to announce shortly its plans for a significant, companywide layoffs. Although Microsoft has cut jobs in a particular unit or location in the past, it has managed to navigate through all past downturns without having to resort to such broad job cuts.
But as CEO Steve Ballmer told CNET News earlier this month, this is no ordinary downturn.
"The fact of the matter is, this is not a downturn, this is a bit of a reset," he said in an interview at the Consumer Electronics Show in Las Vegas. "Those are quite different and we're trying to really suss through what we think that means for us."
As part of the process of adjustments, we will eliminate up to 5,000 positions in R&D, marketing, sales, finance, LCA, HR, and IT over the next 18 months, of which 1,400 will occur today. We'll also open new positions to support key investment areas during this same period of time. Our net headcount in these functions will decline by 2,000 to 3,000 over the next 18 months. In addition, our workforce in support, consulting, operations, billing, manufacturing, and data center operations will continue to change in direct response to customer needs.
The firm also reported a net profit of $4.17bn (£3bn) for the three months to 31 December, down 11% on last year and less than analysts' expectations.