Microsoft Cutting up to 5,000 Jobs

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.

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  • Anonymous
    Intel's laying off more people than Microsoft. If AMD lays off an tiny number of people, Tom's is all over it, I wonder when we might see a piece about Intel's new layoffs...
  • hellwig
    R&D, Marketing, Sales, Finance, LCA, HR, and IT... I was under the assumption most of those jobs (minus R&D) were outsourced to various contractors anyway. It surprises me that Microsoft has 5000 employees in those fields, my guess is a lot of developers in the R&D field are going bye-bye. Sure, MS will cutback spending on the other areas, but for them, that probably doesn't involve reducing head-count. Not unless they classify contracted employees differently than any company I've ever worked for.
    It's only just beginning of the downslide for Microsoft. So what are the "Key Investment" areas? Hire more low wage employees from India? Spend more money outside of the US? Bribe Steve Jobs to stop thinking?

    The ONLY good news about this it that as Microsoft continue to fail and fall below expectations in just about everything they do, the guy holding the bag (Steve Ballmer) will eventually be asked to resign. Maybe then, and only then, will Microsoft actually start to innovate rather than copy and duplicate -- the KMart of software.

    Maybe the OS should just go back to being command line only, who needs a GUI, right? Didn't some loopy brain idiot post a comment about Aero Glass being too demanding and wanted to get rid of it and animations and hell why not just black and white and one step back, command line only, there ya go -- progress!!! Ugh!