Microsoft Job Cuts

[LilAbner]

Apparently no one is immune to the bad economy. GameTradeJournal (http://www.gametradejournal.com/2009/01/microsoft-reduces-headcount-posts.html):

In response to an 11% decrease in net income for its second quarter, Microsoft Microsoft [MSFT] will reduce its headcount by as many as 3,000 in the next 18 months, starting with 1,400 today.

Microsoft reported a net income of $4.1 billion, or 47 cents per share on revenues of $16.6 billion for the quarter ended December 31. That compares to a net income of $4.7 billion, or 50 cents per share on revenues of $16.3 billion in the same quarter a year ago. Although the company’s profit rose, it fell roughly $900 million short of the company’s expectations, Microsoft said.

In an email to employees, Microsoft CEO Steve Ballmer said the company will eliminate 5,000 positions in the next 18 months, but add new ones in “key investment areas” during the same period of time, making the net headcount reduction between 2,000 and 3,000. This marks the first time the company has ever eliminated jobs in its 34-year history. The company declined to comment if any of the positions eliminated will fall in its Entertainment and Devices Division (EDD), for which Xbox 360 makes up the lion’s share.

[Metal Jesus]

I don't see this as a big deal... According to the Seattle Times, Microsoft has DOUBLED its employee count in the last 4 years to 96,000. Trimming the fat a little bit in this economy is a smart idea.

[Trazzlo the Magnificant]

Plus they are only expecting the total head count to go down by 2,000 to 3,000 over the next year and a half. They are still hiring but letting go staff in areas that aren't as effective.

Sad yes, but could be far, far worse.

[Wslove]

I bet this is a)cleaning out the team that produced Vista, the new Windows ME or b) Zune people getting let go as they kill the product line.

The 360 is actually making them money, a lot of money, and they are in prime position to hit number 1 the next console cycle if they play their cards right. So if the cuts are in EDD I bet it's Zune finally getting taken out back and put out of its misery.

[vallor]

Good luck to those people who have been let go. It doesn't matter if it is 10 people from a small company or 35,000 from Circut City. Yesterday someone had a job, today they don't and that is almost always a sad thing.

[Dibbler]

It's sad that a company that made over $4 billion needs to lay off employees. Seems like they are just adding to the recession.

[Roc Ingersol]

Plus they are only expecting the total head count to go down by 2,000 to 3,000 over the next year and a half. They are still hiring but letting go staff in areas that aren't as effective.I don't think you can depend on them following through with any long-term plans, when they aren't even providing guidance for the next quarter.

That's a bad thing. If next quarter blows their internal guidance today's 5000 will be followed by thousands more.

Also: the lion's share of that 4 billion in profit is from the software monopoly. They could essentially shutter the company and pull down billions in profit for another few years. It does seem bad to fire people when you're bringing in that much cash, but it's not good for the company to float money pit projects either. Are they taking advantage of the 'bad news' climate to cut a little faster and more brutal than they might otherwise? Probably. But it's not so barbaric. I doubt they're cutting anything that wasn't already on the chopping block.

[pwnophobia]

I bet this is a)cleaning out the team that produced Vista, the new Windows ME

Have you used Windows 7? It's essentially a tuned up Vista.

[modeps]

Have you used Windows 7? It's essentially a tuned up Vista.

SHUTUPSHUTUPMOJAVESHUTUP!

[Trazzlo the Magnificant]

I don't think you can depend on them following through with any long-term plans, when they aren't even providing guidance for the next quarter.

That's a bad thing. If next quarter blows their internal guidance today's 5000 will be followed by thousands more.

Also: the lion's share of that 4 billion in profit is from the software monopoly. They could essentially shutter the company and pull down billions in profit for another few years. It does seem bad to fire people when you're bringing in that much cash, but it's not good for the company to float money pit projects either. Are they taking advantage of the 'bad news' climate to cut a little faster and more brutal than they might otherwise? Probably. But it's not so barbaric. I doubt they're cutting anything that wasn't already on the chopping block.Wow, that's a long way to come right back to "I doubt they're cutting anything that wasn't already on the chopping block", which is essentially what I said. It's not 5,000 jobs lost, its tuning up the whole system and letting some less effective employees go plus cancel the lesser projects. But, they are still planning on hiring.

Sure, things can get worse, precisely why they aren't making long term predictions. In this market, find someone who is. Nobody is committing to anything.

That said, their current plan is a reduction of staff in the 2-3 thousand range. After all the hiring they have done in the last few years, this isn't exactly unexpected.

[Roc Ingersol]

Wow, that's a long way to come right back to "I doubt they're cutting anything that wasn't already on the chopping block", which is essentially what I said.I wasn't taking issue with anything you said; just adding a 'I wouldn't put money on those hiring estimates being accurate' note.

The second paragraph was a response to the general tone of 'evil corporation' in Dibbler's post. I should have separated out those lines of thought a bit more clearly.

[grognard66]

It's sad that a company that made over $4 billion needs to lay off employees. Seems like they are just adding to the recession.

This does look bad on the surface. Playing Devil's Advocate though, part of the reason they still made $4B was because they are willing to make shrewd choices like this.
Unfortunately, most publically owned companies are going to continue laying off workers even if they are profitable, simply because it is expected of them by shareholders nervous about the price of their shares. That's the dark side of Capitalism - the stock market loves layoffs. Of course, when so many people are getting laid-off it just becomes a vicious circle and you don't have that critical mass of middle class to support our consumer driven, glass house economy.

[Trazzlo the Magnificant]

I wasn't taking issue with anything you said; just adding a 'I wouldn't put money on those hiring estimates being accurate' note.

The second paragraph was a response to the general tone of 'evil corporation' in Dibbler's post. I should have separated out those lines of thought a bit more clearly.Ahhhh, then your post makes more sense. Thanks. :)

[dr_wily]

positive beta reviews plus barely about a 8 P/E.. share price 17$.. sounds like a good deal to me.

I can see it going back to its avg of 25$ easily once released.. same thing happened when vista was released despite bad reviews.

[Metal Jesus]

positive beta reviews plus barely about a 8 P/E.. share price 17$.. sounds like a good deal to me.

I can see it going back to its avg of 25$ easily once released.. same thing happened when vista was released despite bad reviews.

The reviews for Windows 7 have been universally positive. Even from a Mac users like myself! ...I'm kinda surprised honestly...cuz I hated Vista.

[Reanimated]

It's strange to see a company making so much money laying people off, but I guess that's how it goes sometimes. If you've got dead weight, you gotta cut it.

[Ozymandias]

The reviews for Windows 7 have been universally positive. Even from a Mac users like myself! ...I'm kinda surprised honestly...cuz I hated Vista.

Have a Powerbook at home, Vista all over the place, and am using Win 7 on my laptop as we speak... and I have to say it rocks. Seriously, go check out the beta if you haven't already.

[Trazzlo the Magnificant]

My clients seem to be more willing to look at Windows 7 than they were at Vista. The hardware requirements seemed too high for their use in their daily business. I always got "We'll stick to XP thanks, got the kinks worked out, and it works on inexpensive hardware".

These days the on-board chipsets can run Vista, the hardware requirements aren't high end nor expensive. Most assume they have to migrate over time, but that doesn't mean Microsoft gets to decide when that happens. Now they are slightly caught up in the recession. It's slow now but they are still considering upgrading when Win7 comes out, in preparation for the construction projects.

The chance of them going to any other OS are nil, since so much of their software is proprietary and Windows based. I think Windows 7 will sell very well.

[riposte101]

It's strange to see a company making so much money laying people off, but I guess that's how it goes sometimes. If you've got dead weight, you gotta cut it.

By laying people off, they hope to make even more money.

[Sarconix]

Apparently included in this is part (or all?!) of the ACES team that creates MS Flight Simulator:

http://www.gamasutra.com/php-bin/news_index.php?story=21981

[ONI5]

Apparently included in this is part (or all?!) of the ACES team that creates MS Flight Simulator:

http://www.gamasutra.com/php-bin/news_index.php?story=21981
Aces never game the XBOX or 360 any love so it's ther own fault. They should have given me a combat flight sim on the 360.

[Dibbler]

The reviews for Windows 7 have been universally positive. Even from a Mac users like myself! ...I'm kinda surprised honestly...cuz I hated Vista.

I installed it and ened up having to reformat my computer. I use a lot of Microsoft products like Live OneCare for anti-virus and I own a Zune.:rolleyes: Unfortunately both product had issues like "NOT WORKING". Microsoft recommended that I buy a new anti-virus software for Windows 7 but it seems to me that they could make there own software work. After some searching I learned that OneCare is gone on June 30th and they are creating a free program to replace it so I guess I could see why they didn't fix that. Zune required that I restart it in Admin Mode every time.

Overall I liked the OS layout a lot. It's Vista with most of the pop-ups removed and all the menus simplified.

[ElektroDragon]

I can't believe they cut Chris Paladino and Nelson Rodriguez!!!!!!!!!!!

[aries100]

Windows is still in Beta testing stage; it is not a finished product yet. And I don't quite understand why a company that has earned 900 million? (or billion?) dollars the last year (or the last quarter?) needs to let people go, make them redundant, fire them.

[Mathilda]

I like how they are willing to hemorrhage money out of their xbox and vista divisions, for years now i might add, but they they will immediately eliminate jobs at the 1st sign of trouble.

[Mathilda]

Have you used Windows 7? It's essentially a tuned up Vista.

I heard it was more a super version of XP, if it is vista like in anyway i will be avoiding it, i downgraded back to xp pro a week after getting ultimate. I am anticipating snow leopard though.