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Microsoft Sends 3,000 Employees Packing

By - Source: Tom's Hardware US | B 26 comments

Microsoft yesterday sent out pink slips to thousands of workers.

Back in January the company reported revenue of $16.6 billion for the quarter, $900 million lower than it expected. That same day, Microsoft announced it would be cutting 5,000 jobs over the next year and a half. 1,400 layoffs were immediate.

This week, the company let 3,000 more members of staff go. Steve Ballmer said in an email that the company was “mostly but not all done” with the planned cuts to be completed by June 2010.

“With this announcement, we are mostly but not all done with the planned 5,000 job eliminations by June 2010. We are moving quickly to reach this target in response to consistent feedback from our people and business groups that it’s important to make decisions and reduce uncertainty for employees as quickly as possible, and so that organizations can concentrate their efforts and resources on strategic objectives."

In January's memo, the CEO said the company will continue to hire as it fires: “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.” Laoffs are expected to save $1.5bn in operating costs.

Check out the rest of Ballmers email on ZDNet.

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  • 3 Hide
    grieve , May 6, 2009 5:30 PM
    LOL @ the picture!
  • 1 Hide
    grieve , May 6, 2009 5:31 PM
    I guess when a company reports revenue of $16.6 billion for the quarter they need to lay off people.... ?
  • 5 Hide
    tenor77 , May 6, 2009 5:32 PM
    Yet execs never take a pay cut. That always drives me nuts.
  • 2 Hide
    danimal_the_animal , May 6, 2009 5:48 PM
    Yeah lets fire 5000 people so we can build all kinds of non work related crap at the campus.....
  • 1 Hide
    lamorpa , May 6, 2009 5:52 PM
    How can things at the going on at the campus be non work related?
  • -2 Hide
    misnad , May 6, 2009 5:57 PM
    Well, each organisation has their own quarterly targets. Guess this is the new response trend when they fail to meet them. But then again, a quick sudden layoff is better than sending small pockets of staff home a week at a time as that would cause a lot of anxiety among the workforce. Each person would wonder, "Am I next?". A company's got to do what a company's got to do, I guess. The flipside of it is that they might need those 3000 employees back the next quarter if they've suddenly seen a massive growth in revenue as well as a resource crunch.
  • 6 Hide
    JMcEntegart , May 6, 2009 6:05 PM
    lamorpaHow can things at the going on at the campus be non work related?


    I think he was referring to the Microsoft pub or mini-mall they're developing for employees.
  • 1 Hide
    cletus_slackjawd , May 6, 2009 6:07 PM
    Makes M$ look kinda stupid for hiring 3,000 employees that they apparently didn't need huh? Or, maybe they "let go" 3,000 employees, and then re-hire them back as part-time workers at lower wages and benefits. Capitalism rules.
  • 8 Hide
    nirvanabah , May 6, 2009 6:15 PM
    Why is Ballmer casting a spell?
  • 6 Hide
    tenor77 , May 6, 2009 6:24 PM
    nirvanabahWhy is Ballmer casting a spell?


    Windgarium layoffosa!
  • 3 Hide
    matt_b , May 6, 2009 7:01 PM
    Is this a sort of "thank you" after all the hard work and positive buzz for Windows 7(which is practically completed)? They are one of the few companies that are not hurting during these times. Not only that, but they will continue to generate positive revenue due to the dependence and addiction the computer world has built up around them - I don't understand this move.
  • 2 Hide
    dtemple , May 6, 2009 7:08 PM
    JMcEntegartI think he was referring to the Microsoft pub or mini-mall they're developing for employees.

    I think Microsoft would rather have 5,000 less employees if the remaining employees have higher morale and productivity due to these resources they're developing on campus.
  • 5 Hide
    manjyomethunder , May 6, 2009 7:14 PM
    Anyone care to photoshoop some lightning coming out of those hands?
  • -2 Hide
    nirvanabah , May 6, 2009 7:17 PM
    I don't understand why you'd expect Execs to take a pay cut. They earned their position and one would assume if they were to cut anyone's pay it would be the employees they let go (rather than firing them outright). If the Execs were as expendable as the 5,000 employees they're cutting, they'd simply fire them too don't you think?
  • -1 Hide
    Anonymous , May 6, 2009 7:22 PM
    A company that wants to survive will cut costs before they are needed. Should Microsoft wait until financial ruin is imminent to lay people off?

    Microsoft CEO Steve Ballmer received $1.35 million in 2008 ($650k in salary + $700k bonus), a relatively small number for a company the size of Microsoft, let alone continued profitability. Even if he received $0 compensation, that would pay for less than 17 full time employees at $80,000/year [the 2008 average].

    Yes, it sucks for those laid off. Cutting costs will improve the odds of continuing to pay the ~90k employees still at Microsoft.

    Microsoft is planning to hire 3,000 employees over the next year. Probably different positions than those eliminated.

    No, I do not work for Microsoft or any of its suppliers, vendors, etc.

    I have been a contractor and FTE (blue badge) at Microsoft in the 90s.
  • -1 Hide
    wikiwikiwhat , May 6, 2009 7:24 PM
    Execs hae influence over other markets due to their previous acheivements and if employed by Microsoft it benefits Microsoft to have them. Joeshmoe not so much. Got go up that ladder as fast as you can and be better than the next guy.
  • 0 Hide
    tenor77 , May 6, 2009 7:33 PM
    nirvanabahI don't understand why you'd expect Execs to take a pay cut. They earned their position and one would assume if they were to cut anyone's pay it would be the employees they let go (rather than firing them outright). If the Execs were as expendable as the 5,000 employees they're cutting, they'd simply fire them too don't you think?



    And you think that any employee is worth 192 million a year? Oracle thinks so I guess. I know it's a sacrifice but some of these execs might cut a few million and keep a few extra employees.

    I know crazy thinking right? I'm no socialist but as an employee I would hope my CEO would cut a couple million out of his salary before doing layoffs if the company was in that much trouble financially.
  • 2 Hide
    zear , May 6, 2009 7:42 PM
    tenor77Windgarium layoffosa!

    I just threw up a little...
  • 3 Hide
    hellwig , May 6, 2009 7:48 PM
    nirvanabahI don't understand why you'd expect Execs to take a pay cut. They earned their position and one would assume if they were to cut anyone's pay it would be the employees they let go (rather than firing them outright). If the Execs were as expendable as the 5,000 employees they're cutting, they'd simply fire them too don't you think?

    When your exec sits on your board of directors, he basically gets to vote on his own pay raises. When was the last time your boss said "propose a new salary for yourself and I'll take a vote amongst your peers"? Its the same with politicians. Congress votes themselves payraises all the time. Rather than fire thousands of employees, or milk tax-paying citizens for more money, they could reduce the problem by eliminating a few million of their own individual (or collective) salaries, yet they don't.

    Hell, I just recently took a 5% paycut myself, but my manager didn't (no, I don't work at MS). Hope they like that few hundred bucks a month they're getting back (maybe they'll spend it on more managerial "training" retreats), but someone like Steve Balmer taking a 5% paycut would open up millions, and save hundreds of jobs.
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