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Microsoft cuts 800 more jobs, exceeds original forecast
Microsoft has announced what it hopes will be the last in a recent series of layoffs aimed at cutting operating costs. Approximately 800 workers spread across multiple business units and locations will be receiving pink slips, going beyond the 5,000 originally announced back in January.
This marks the first large round of layoffs in the company's history. It immediately let go about 1,400 people after the cuts were announced in January, followed by more than 3,000 in May. In total, around 6.3% of its approximately 91,000 head count will have been eliminated after the program is completed, up from the 5.5% previously expected. Microsoft also reduced executive pay, cut travel expenses and dropped several products including Money, Windows Live OneCare and its Flight Simulator franchise.
Last month the company managed to beat analyst expectations for its first fiscal quarter earnings and revenue, which it attributed to its tight cost controls and better-than-expected sales, although it still saw a drop in revenue and steep losses from its online business division. All eyes will be on Microsoft early next year when it reports its fiscal second quarter results, as these will include Windows 7 sales numbers for the first time.
This marks the first large round of layoffs in the company's history. It immediately let go about 1,400 people after the cuts were announced in January, followed by more than 3,000 in May. In total, around 6.3% of its approximately 91,000 head count will have been eliminated after the program is completed, up from the 5.5% previously expected. Microsoft also reduced executive pay, cut travel expenses and dropped several products including Money, Windows Live OneCare and its Flight Simulator franchise.
Last month the company managed to beat analyst expectations for its first fiscal quarter earnings and revenue, which it attributed to its tight cost controls and better-than-expected sales, although it still saw a drop in revenue and steep losses from its online business division. All eyes will be on Microsoft early next year when it reports its fiscal second quarter results, as these will include Windows 7 sales numbers for the first time.
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User Comments (11)
Post a comment| TomSEA on November 5, 2009 12:13 PM | I work in Seattle in the high-tech industry and have a
number of MS employee's who are good friends. I asked them
about this and they tell me it's really insignificant.
Basically MS is eliminating positions that are no longer
viable and most of those 800 who were in those positions are
headed to other departments. Along with the 91,000 head
count, MS also has tens of thousands of contractors working
for them. The original 5,000 cuts was definitely newsworthy. Not so sure about this 800 position eliminations. |
| swilllx2p on November 5, 2009 1:14 PM | Good bit of extra info on that TomSEA, I'm glad to hear that it really isn't as bad as it may seem for the 800 employees. I really do like the fact that executive pay and travel expenses are being cut though..seems most companies will lay people off but no way will they cut the pay of their fat cat execs. |
| elroacho72 on November 5, 2009 2:31 PM | I think they are trying to make the numbers look has good as possible until things turn around. I seriously don't think it could be that long term. Good grief W7 has to be doing something for them. |
| shalimar on November 5, 2009 3:36 PM | Ah well so much for getting a job working for M$ |
| Guest on November 5, 2009 5:10 PM | @TomSEA -- sounds like you're drinking the KoolAid. Losing a job is losing a job. And layoffs = leaving Microsoft. Not moving around in the departments and even WHEN that option is available, it is NOT guaranteed as each terminated employee has X amount of time to move elsewhere in the company..and if they don't in that timeframe, they are cut. Some of the people being let go without that option have been there over ten years... and they're suddenly not "viable?" Even though those positions get replaced by contractors and outsourced to India? Get your facts straight, Tom. Your MS friends are probably the SDETs and PMs that don't work in HR and don't actually know anything. |
| Xclusiveitalian on November 5, 2009 6:32 PM | In these tough times no job is safe, not even with a billion dollar company...especially with a billion dollar company. As much as I love WIn 7, Microsoft are still money hungry corp. Even if they do make tons of money they'll let people off. Did you ever see the fifth element, they kinda remind me of the bad guys company in that movie lol |
| Beggars on November 5, 2009 8:31 PM | One of the people laid off was Don Dodge, probably the
biggest and worse mistake Microsoft has ever made since IE6.
Check out this article on TechCrunch about being fired, the
comments are especially insightful:
[link] For a company experiencing a lot of wins at the moment, they're sure making some foolish decisions to equal. |
| ken777 on November 5, 2009 9:11 PM | This sucks for employees, especially when you work for a company that's still making about a $1 billion in profit each month, but this is standard practice at any large company. Whenever there's a downturn, it's time to cut costs and pare off the less profitable parts of a company. When sales recover, the company will be more profitable than ever now that it's leaner and more efficent. Got to always keep the profits growing to keep the shareholders happy. |
| freedomthinker on November 6, 2009 12:36 AM | Well... This really sucks :/ |
| razerblade on November 6, 2009 2:15 AM | I know they were planning these cuts, but with all the success of Windows 7 you would think that a lot of people would be able to keep their jobs! |
| jazboy on November 6, 2009 10:28 AM | Earlier microsoft jobs used to be heaven. people used to say that if you got into microsoft, your life is set. You don't have to worry about anything. Because they used to tell microsoft / window will be there after your life too. I also agreed that time. But seeing after these layoff, i think there is no permanent job and nothing is permanent in life. |
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