Microsoft Cuts 800 More Jobs Worldwide, Exceeding Original 5,000

Microsoft confirms plans to cut another 800 employees from its worldwide payroll, as part of its longer-term plan to eliminate 5,000 positions. With its revenues hammered by the recent economic recession, Microsoft eliminated the employees as part of a larger program to streamline its operations. Added to the total number of layoffs occurring throughout 2009, the new job cuts likely exceed the originally predicted 5,000-employee job-cut total.

Microsoft confirmed on Nov. 4 that it will cut an additional 800 employees from its payroll, from multiple locations around the world. These newest eliminations are part of a larger 5,000-employee cut announced at the beginning of 2009.

This latest round of cuts, however, may have slightly exceeded that original 5,000-employee goal. As of Oct. 23, Microsoft had 91,005 employees worldwide, some 54,923 of them in the United States.

In its most recent report for the quarter ended Sept. 30, filed with the Securities and Exchange Commission on Oct. 23, Microsoft claimed to have "reduced our overall number of positions by approximately 5,000 and headcount by approximately 4,600."

That filing suggested that the job-elimination program, originally announced in January 2009, would cut positions from a variety of sectors, including marketing, sales, finance, legal, human resources and information technology. It stated the completion date for the job cuts as June 30, 2010. Links to Microsoft's SEC filings can be found here.

If that figure of 4,600 jobs is approximate within a few dozen, or even a few hundred, that means the additional 800 cuts today would have Microsoft exceeding its original 5,000-layoff figure by a few hundred personnel.

According to the blog TechFlash, Microsoft spokesperson Lou Gellos confirmed that the total number of layoffs exceeded the original plan.

When contacted by eWEEK, a Microsoft spokesperson offered an official statement:

""Earlier this year, we announced that in order to reduce costs, increase efficiency and prioritize our focus areas, we would eliminate approximately 5,000 positions by June 2010. Today, we are eliminating around 800 positions ... and have completed our reduction plan sooner than we anticipated 11 months ago."At the same time, we continue to hire in priority areas, but also understand that continuing to manage our business closely, as we always do, can mean additional headcount adjustments.""

Microsoft cut 1,400 jobs on Jan. 22, soon after its initial January announcement. The following month, Microsoft reportedly asked a portion of its former employees to return a portion of their severance that had apparently been overpaid by the company; after that news leaked, and an online flurry erupted, Microsoft reversed and told those employees that they could keep the money.

Microsoft announced its second round of job cuts on May 5, the same day it issued the release candidate for Windows 7. Some 3,000 workers were affected. In an e-mail to employees, Microsoft CEO Steve Ballmer suggested that the company was "moving quickly to reach this target [of 5,000 job eliminations] in response to consistent feedback from our people and business groups that it's important to make decisions and reduce uncertainly for employees as quick as possible."

At that time, Ballmer also raised the specter of additional layoffs:

""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.""

Although Microsoft faced a declining revenue trend throughout 2009, its reported results for last quarter were stronger than expected, raising the prospect that Redmond could soon find its way out of the dark economic woods. Nonetheless, Microsoft's revenues of $12.92 billion for the quarter represented a 14 percent decline year-over-year from 2008, with operating income, net income and diluted earnings per share for the quarter declining 25 percent, 18 percent and 17 percent, respectively.

Microsoft's hope is that a rising economy will encourage consumers and businesses to spend more lavishly on IT infrastructure, boosting sales of PCs along with new Microsoft products such as Windows 7. During a recent earnings call, however, Microsoft executives remained cautious about CIO spending throughout the balance of 2009.