You could see this coming a mile away. Microsoft has announced it will cut 5,000 jobs as its overall profits dropped by 11% this past quarter. Okay, that was less than the 15,000 that was rumored. But it’s still a lot.
But I digress.
These layoffs come despite the fact that revenue was up this past quarter. Apparently 1400 workers will be punted now and the rest will be punted over the next 18 months. This will reduce costs by about $1.5 billion a year. On top of “headcount-related expenses, vendors and contingent staff,” the company will rein in its facilities, capital expenditures and marketing. I mentioned the facilities part of this yesterday, so that should not be a shock to frequent readers of this blog.
Of interest, Microsoft CEO Steve Ballmer sent employees an e-mail giving his view on the layoffs:
While this is the most challenging economic climate we have ever faced, I want to reiterate my confidence in the strength of our competitive position and soundness of our approach.
With these changes in place, I feel confident that we will have the resources we need to continue to invest in long-term computing trends that offer the greatest opportunity to deliver value to our customers and shareholders, benefit to society, and growth for Microsoft.
Also of interest, the markets reacted as you would expect. Investors pressed the sell button and as I write this, their stock is down over 10%.
Perhaps laid off Microsoft employees can find jobs at Apple. They don’t seem to be having a problem navigating this rough economy.
UPDATE: Here’s a transcript of the Microsoft con call.
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This entry was posted on January 22, 2009 at 12:12 pm and is filed under Commentary with tags Microsoft. You can follow any responses to this entry through the RSS 2.0 feed.
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Microsoft Profits Plummet… 5000 Jobs Shed…. Apple Fanbois Laugh [UPDATED]
You could see this coming a mile away. Microsoft has announced it will cut 5,000 jobs as its overall profits dropped by 11% this past quarter. Okay, that was less than the 15,000 that was rumored. But it’s still a lot.
But I digress.
These layoffs come despite the fact that revenue was up this past quarter. Apparently 1400 workers will be punted now and the rest will be punted over the next 18 months. This will reduce costs by about $1.5 billion a year. On top of “headcount-related expenses, vendors and contingent staff,” the company will rein in its facilities, capital expenditures and marketing. I mentioned the facilities part of this yesterday, so that should not be a shock to frequent readers of this blog.
Of interest, Microsoft CEO Steve Ballmer sent employees an e-mail giving his view on the layoffs:
While this is the most challenging economic climate we have ever faced, I want to reiterate my confidence in the strength of our competitive position and soundness of our approach.
With these changes in place, I feel confident that we will have the resources we need to continue to invest in long-term computing trends that offer the greatest opportunity to deliver value to our customers and shareholders, benefit to society, and growth for Microsoft.
Also of interest, the markets reacted as you would expect. Investors pressed the sell button and as I write this, their stock is down over 10%.
Perhaps laid off Microsoft employees can find jobs at Apple. They don’t seem to be having a problem navigating this rough economy.
UPDATE: Here’s a transcript of the Microsoft con call.
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This entry was posted on January 22, 2009 at 12:12 pm and is filed under Commentary with tags Microsoft. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.