Microsoft cutting 1,400 jobs today; up to 5,000 in next 18 months as recession hits harder

Seattle Times by Benjamin J. Romano | Jan. 22, 2009 (News Report)

In a press release issued moments ago, Microsoft announced that it is cutting up to 5,000 jobs in research and development, marketing, sales, finance, legal, human resources and IT in the next 18 months, starting with 1,400 today.

It marks the first company-wide layoff in Microsoft's history and comes as the company reports fiscal second-quarter earnings that missed the low-end of its own guidance for sales and earnings per share. It's Windows ... Full Story »

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3.5
 by Marsha Iverson - Jan. 22, 2009

Taken primarily from a Microsoft press release--and possibly their annual report--this blog post provides the company's take on how they'll weather the financial crisis: by "outperforming our competitors and addressing our cost structure."

Ya gotta love the PR industry when declining sales, massive layoffs, salary freezes, and reduced dividends are described as "addressing our cost structure." In the long run, how can companies who depend on selling products or services expect to improve their sales when unemployment hits new highs? Why do stock values rise when people lose their jobs and can't purchase any products? Isn't this somewhat akin to serving "golden goose stew" in the breadlines?

CFO Chris Liddell said in a statement, “Economic activity and IT spend slowed beyond our expectations in the quarter, and we acted quickly to reduce our cost structure and mitigate its impact. We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year. In this environment, we will focus on outperforming our competitors and addressing our cost structure.”

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