Uh oh, Microsoft's the next one up to bat in the job cutting game.
A couple of weeks back Mini-Microsoft speculated about substantial layoffs at the Redmond company, which the site reported we’d see on January 15, just one week before the company announced its earnings for FY09Q2.
While it was all speculation based on what one person has heard next to the watercooler we couldn’t help but feel the “there’s no smoke without fire” vibes coming from the rumor. The site may have been wrong about the date (in case no one has noticed, it’s January 22 not 15) Microsoft has indeed laid off staff along with announcing its quarterly revenues.
The company reported revenue of $16.6 billion for the quarter, $900 million lower than it expected. Microsoft said today it is cutting 5,000 jobs over the next year and a half. Of those 5,000, 1,500 will go today and the company says the lay offs will save $1.5bn in operating costs.
According to an email from Steve Ballmer to staff, 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.”
Check out the full memo from Steve.