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Microsoft Cuts More Employees, Not Done Yet

Microsoft laid off an undisclosed number of employees today as part of a cost-cutting plan that was initiated back in January.

Microsoft laid off an undisclosed number of employees today as part of a cost-cutting plan that was initiated back in January.

A May 5 letter from Steve Ballmer to Microsoft's employees described today's cuts as the second phase of a plan to eliminate 5,000 jobs by June 2010. Microsoft eliminated 1,400 positions back in January when the plan was first announced.

While Microsoft did not indicate how many people were cut today, the company's 10-Q financial report for its fiscal-year 2009 third quarter stated that the company planned to lay off "approximately 3,400 employees" by June 30, 2010.

Ballmer's memo explained that "we are mostly but not all done with the planned 5,000 job eliminations by June 2010." He didn't rule out additional job cuts in the near future.

"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," Ballmer stated in his memo.

Not long after announcing the 5,000 job cuts in January, Microsoft subsequently indicated that it planned to add up to 3,000 new jobs in 2010. According to a Microsoft spokesperson, "We are not sharing any specific figures or details, but can confirm that Microsoft is still planning to hire 2,000 to 3,000 people through mid-2010 and that laid-off employees are considered for rehire."

Microsoft reported a net income drop of 32 percent in its third quarter. Company officials attributed the historic loss to a down economy and declining new PC sales. Chris Liddell, Microsoft's senior vice president and chief financial officer, described the quarter as "the most difficult environment Microsoft has faced in its entire 30-year history."

About the Author

Kurt Mackie is online news editor, Enterprise Group, at 1105 Media Inc.

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Reader Comments:

Wed, May 6, 2009 Curiouser LACAUSA

Any indication which divisions, product lines or geographies are hardest hit?

Am I right in suspecting Microsoft won't hit Europe and Asia as hard as it will the USA?

Are any areas or product lines being essentially scrapped? We could all suggest some candidates. Eliminating a few pointless products could ease cuts in areas whose products are more broadly helpful to businesses and education.

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