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July 7, 2010 11:06 AM

Microsoft Planning Companywide Layoffs: Report



Microsoft is readying to lay off a small number of employees sometime this week, according to The Wall Street Journal, which quoted one of those ever-helpful anonymous sources. TechFlash's Todd Bishop wrote on July 6 that the total number of cuts will be "relatively small in the scheme of things," at least compared with last year's layoffs of 5,000-plus employees. Overall, the company employs more than 88,000 people worldwide.

Microsoft hasn't yet gotten back to me for comment.

In 2009, Microsoft's companywide layoffs were positioned as a response to the global recession. "We will continue to closely monitor the impact of the economic downturn on the company," Microsoft CEO Steve Ballmer wrote in a Jan. 22 e-mail, "and, if necessary, take further actions on our cost structure including additional job eliminations." In the fourth quarter of 2009, Microsoft experienced a dizzying 17 percent decline in year-over-year revenue, as consumers and businesses stopped purchasing both PCs and software--part of a larger multiquarter dip that began to reverse only recently.

But the layoffs also seemed parcel of a larger companywide restructuring, one that saw the elimination of multiple legacy and underperforming projects, and an intensified focus on flagship platforms such as Windows 7 and Office 2010.

Although the economy in some ways has started to improve--Windows 7 proved a hit, and there are indications that business spending is starting to pick up--Microsoft is still undergoing some internal upheaval. Its Entertainment & Devices Division, responsible for projects such as the Xbox and recently deceased Kin, recently saw the departure of some top executives; should the company's upcoming Windows Phone 7 not perform as hoped, its mobile division could certainly undergo a shakeup.

More details about this week's potential layoffs, hopefully, will be forthcoming ...

Editor's Note: I goofed earlier and accidentally wrote "Steve Jobs" when I obviously meant "Steve Ballmer." (This is what happens when you're bombarded all day with Apple news.) Thanks to the commenters who pointed out the error.

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Comments (2)

According to your article the even bigger news is that Steve Jobs became CEO of Microsoft. Now that's news :-)

Keith V :

Wow! Steve Jobs was the CEO of Microsoft in Jan 22! I wonder what Mr. Ballmer thinks about that?

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