Microsoft Moves on Second Round of Layoffs

Microsoft Moves on Second Round of Layoffs In a letter to employees yesterday, Microsoft CEO Steve Ballmer said that the company was moving quickly to complete the layoffs it previously announced in January and said would take place over 18 months. That plan has changed, Ballmer said, because employees said it would be demoralizing if the layoffs occurred over a protracted period of time. So, this week, the company laid off more than 3,000 more employees, nearly reaching its original target of 5,000.

"As part of the plan we announced in January to reduce costs and increase efficiencies, today we are eliminating additional positions across several areas of the company," a Microsoft spokesperson said. "While job eliminations are always difficult, we are taking these necessary actions in response to the global economic downturn."

In the email (the full text of which was obtained by Windows IT Pro and can be found below), Ballmer said that the company was "mostly but not all done with the planned 5,000 job eliminations by June 2010." (Microsoft had previously cut 1,400 positions in January.) The cuts affect positions in the United States and around the world, he said, and could be followed by a third round of cuts.

The cuts don't necessarily mean that Microsoft is scaling back hiring. Indeed, the company previously said it would likely hire 2,000 to 3,000 people during the January 2009-to-June 2010 period. And after laying off 1,400 people in January, Microsoft's next job loss for the first calendar quarter of 2009 was just 800, further suggesting that hiring has continued. The company employs more than 95,000 people worldwide.

Rumors continue to swirl around which groups were hardest hit by the latest layoffs, but Microsoft's MSN, Live Search, and online advertising are most frequently suspected of being near the top.

The full text of Steve Ballmer's email message to Microsoft employees:

"In January, in response to the global economic downturn, I announced our plan to adjust the company's cost structure through spending reductions and job eliminations. Today, we are implementing the second phase of this plan.

"This is difficult news to share. Because our success at Microsoft has always been the direct result of the talent, hard work, and commitment of our people, eliminating positions is hard.

"Today's action includes positions in the United States and in a number of countries around the world. In the United States, affected employees will be notified directly by their managers today. In other countries, local leadership teams will provide more specific information about the impact to their organizations.

"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.

"As we move forward, we will continue to closely monitor the impact of the economic downturn on the company and if necessary, take further actions on our cost structure, including additional job eliminations.

"For those of you directly affected by today's announcement, I want to thank you for your contribution to Microsoft and assure you that we will continue to provide support as we did during the previous job eliminations.

"And for everyone across the company, I want to reemphasize how much I appreciate the way you have pulled together to help the company respond to this difficult economic environment. There's no doubt that these are very challenging times. But together, we are making the right choices to ensure that we will continue to deliver great products and position ourselves for strong future growth and profitability.

"Thank you for your continued hard work, commitment, and focus.

"Steve"

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