The rumour finally comes true.
Microsoft finally breaks its silence on possible major layoff after announcing its plan to cut 5,000 jobs as the company is looking at its financial forecast pessimistically.
Steve Ballmer, the chief executive, made the announcement to shocked Microsoft investors today, delivering another not-so-good news as the company reported an 11% revenue drop for its fiscal year’s second quarter.
The 5,000 workers represent about 5.5% of Microsoft’s 90,000-over employees worldwide.
The job cut will begin as early as next week with more than one thousand workers set to become its first batch of victims. The layoff exercise is estimated to last for 18 months, with possibly other rounds of job cuts to be announced at later stage. Various positions and levels are affected in the move, including sales, finance, research & development and technology.
The retail and consumer market has been badly affected with the current global economic downturn, and sales of personal computers have dropped dramatically in the recent months. Consumers have been shrinking their wallets in anticipation of the upcoming recession. As most computers are running on Microsoft operating systems, it is only natural to see the company’s revenues going down the same hill.
An unconfirmed rumour is currently spreading wide that software giant, Microsoft is poised for a round of significant layoff, involving some 15,000 workers, or 17% of the company’s total workforce.
2 well known blogs, Fudzilla and Mini-Microsoft started covering stories of a possible massive layoff by Microsoft in December, and both are confident that what they are telling their readers are nothing but the blatant truth.
It wasn’t clearly indicated if the workers affected are full time employees, or those who are employed on contract, or through third party contractors.
In the meantime, the CNBC news took a moderate approach by saying that some restructuring is possible, but major layoff is probably unlikely. The restructuring will be aligned towards cutting the company’s operational costs and implemented through non renewal of contract workers, whose contracts are lapsed. Attrition will also be part of the game where positions which are made vacant would not be filled.
Microsoft, which prides itself with its best selling products – Windows operating system, is headquartered in Redmond, Washington, and currently employs more than 80,000 workers worldwide. However, the company is losing its popularity with its latest Windows, Vista, considered as one of the worst operating systems for the year 2008 by pundits. Its once popular browser, Internet Explorer is also now facing intense competition from rivals, Mozilla’s Firefox, Apple’s Safari and the latest, Google’s Chrome.