More details emerging on Microsoft job cuts
Most of the 5,000 layoffs announced by Microsoft yesterday will be for staff at its Redmond, Washington offices. It appears online services such as search and advertising will be hardest hit.
In a memo to staff, CEO Steve Ballmer said the cuts would come in marketing, sales, finance, human resources, legal affairs and IT (presumably administrators on the company’s own computers). He also said some positions would go in research and development; for a major tech firm, cutbacks there are often seen as a false economy in the long term.
Ballmer also explained that the company will continue to take on new staff. That means that besides the 1,400 jobs eliminated yesterday, the total number of employees will drop between 2,000 and 3,000 over the next 18 months. He also noted that, beyond the redundancies, the head count will continue to fluctuate naturally in departments which depend specifically on customer numbers, such as support and billing.
Anonymous postings on a blog apparently frequented by Microsoft employees suggest the cuts will affect staff working on Live Search, Office and the Zune player. As would seem logical, those working on Windows 7 will apparently escape the axe.
The Seattle Post-Intelligencer notes that two staff who had visible roles in the Xbox Live Community are among the victims. While it was probably inevitable given the scale of the job losses, it’s a big step to axe staff who have such a direct relationship with a section of the firm’s customer base.
Meanwhile Bloomberg reports on the knock-on effects on other Seattle businesses. A bicycle shop, a gym and a corporate furniture supplier all say the fear a drop in revenues thanks to the layoffs.
We may be living in a globalized world, but it appears the vast majority of job cuts will come in the US. For example, the New Zealand Microsoft office says no local staff will be affected, while reports from Australia say just one employee there will be cut.
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January 24th, 2009
Just be aware that the recession hasn’t quite hit Australia — no telling what will happen once they start feeling the bite.
January 25th, 2009
There wouldn’t have been any reduction in workforce if MS had a union in there. Especially with a measly 4 billion profit last quarter. The union would have just said no way. You let one go and we all walk. The end.
But since our dead ex-president Reagan was so successful in brainwashing people on the evils of unions and the wonderulness of CEO greed we’re left to there mercy.
The successful elimination of pensions that was replaced with 401k’s, ROTH’s, IRA’s will no doubt make retirement a myth for the working class in america.
Tragic.
January 26th, 2009
Wrong. Very wrong. Microsoft reported a 54% drop in revenues for the current fiscal year.
I don’t doubt that many or even most Zune owners are satisfied with what they have. Here’s my thing: Apple dove into the MP3 market when that market was already well on its way to maturity. The iPod quickly made a big splash, and iTunes has played no small part in helping the iPod acquire a 70% market share. Apple did not engage in illegal, monopolistic business practices in order to achieve that level of prominence; nor did Steve Jobs hypnotize buyers, steering them towards the iPod.
When the iPod was released in October of 2001, it succeeded during a recession caused by the terrorist attacks of 9/11. If the current economic climate adversely affected the Zune and other consumer products, then it stands to reason that it also adversely affected iPod sales. Yet, Apple reported a growth in iPod sales for the most recent quarter, versus a 54% drop in Zune revenues. How much better would the iPod have faired this quarter without the deepening recession?
I believe that Microsoft and its investors need to re-evaluate the Zune with regard to how it affects other products, and how it affects shareholder interests. If I’m a Microsoft competitor — and I don’t believe that Apple and Microsoft compete in the sense that they appeal to very different groups of customers — then I truly hope that Microsoft continues to throw money and other resources at the Zune. Let them and their investors learn the hard way. Again.
January 26th, 2009
Yeah, the UAW has done wonders for Michigan the last 20 years. I was around in the ’80’s when union organizers tried to get IT workers, we laughed them out of the place.
Pensions aren’t viable for a number of reason. It’s rare to stay with one employer long enough to collect one, they aren’t portable like 401Ks and the companies have to work harder to retain key employees. How many pensions go bye bye when the company goes under? Yes there are federal backups, but nowhere near the amount needed. 401Ks are still there. There is no such thing as portable pensions. There is an offsetting benefit of being able gain experience and take better opportunities and not lose the .
Those PATCO air traffic controllers I assume you are referring to under Reagan were not allowed to strike Under the Taft-Harley act. While government unions were prohibited from striking, many did previously, such as postal workers. No one enforced it until Reagan.
They walked. The end, of PATCO anyway.
Making companies hang on to employees during financial down turns hurts earnings and stock pricing. The reason for only a current 12% workforce union membership here in the States. Most of the very needed reforms unions brought us back in the are currently
They are a millstone. You had it partly right. The End. Unions are throwbacks. If you like outsourcing you’ll love unions.