Microsoft plans on laying off an additional 27 employees from its Redmond and Bellevue, Wash., locations, with the cuts due to take place Nov. 1. Microsoft made no indication of which division the cuts would come from.
A Microsoft spokesperson told the Seattle Times that the 27 layoffs had been enacted “to reduce costs and increase efficiencies,” and that “while job eliminations are always difficult, we are taking these necessary actions to realign our resources against our top priorities.”
The 27-employee cut follows on the heels of much larger staff eliminations earlier in 2009.
On Jan. 22, Microsoft announced plans to lay off up to 5,000 employees, with the substantial majority of those cuts enacted by the beginning of May. However, Microsoft CEO Steve Ballmer also left the door open to future reductions, sending an e-mail to employees that read in part: “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.”
Those job cuts caused something of a public-relations incident in February, after news leaked that Microsoft had asked laid-off employees to return portions of their severance checks, which Redmond said it overpaid due to an “inadvertent administrative error.”
Faced with a backlash, Microsoft later reversed course and told employees that they could keep the overpayments, which reportedly ranged from a few hundred dollars to around $5,000 per employee.
Although the recent partnership agreement between Microsoft and Yahoo will result in an unspecified number of jobs being cut by Yahoo-along with other employees being integrated into Microsoft-there is no indication yet that the new alliance will end in job cuts on the Microsoft side.
In addition to layoffs, Microsoft has sought to restructure and consolidate its business practices through the elimination of various applications and services. Throughout 2009, Redmond has eliminated underperforming programs, such as Soapbox-its YouTube competitor-while also slashing legacy products such as Money and Encarta.
As the economic recession took a toll on the sales of PCs and other devices, Microsoft’s cash flow suffered accordingly; the fourth fiscal quarter of 2009 saw the company report a 17 percent decline in year-over-year revenue, with earnings of $13.10 billion, roughly $1 billion below Wall Street estimates.
A major part of Microsoft’s refocus centers on the new iterations of platforms such as Windows 7 and Office 2010, both of which need to be substantial hits with consumers and the enterprise if Microsoft wishes to reverse its current economic situation.