Microsoft Slashing Jobs, Mobile Facing Deepest Cuts

• Posted: Friday, January 23, 2009
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• Author: pradhana
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• Filed under: Business Analysis, Microsoft

By Jason Ankeny

Microsoft announced it will make the most significant job cuts in the company's 34-year history after releasing dismal second quarter financial results. The software giant plans to eliminate up to 5,000 jobs--about 5.5 percent of its workforce--over the next 18 months after net income dropped to $4.17 billion, 11 percent off year-ago totals. "We are certainly in the midst of a once-in-a-lifetime set of economic conditions," Microsoft CEO Steve Ballmer told investors during a Thursday conference call. "Our model is not for a quick rebound. Our model is things go down, and then they reset. The economy shrinks."

According to Microsoft, the job cuts will target positions in R&D, marketing, sales, finance, legal, HR, and IT--1,400 jobs were eliminated Thursday. Microsoft adds the initiatives will reduce its annual operating expense run rate by approximately $1.5 billion and reduce fiscal year 2009 capital expenditures by $700 million. ZDNet reports that Microsoft's Entertainment and Devices unit, which is responsible for its Zune, Windows Mobile and Xbox products, is suffering the brunt of the first-wave job cuts--the impact of the employee losses on the E&D product roadmap is presently unknown. [FierceMobileContent]

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