Reports Emerging Of Microsoft Lay-Offs

Microsoft is laying off a small number of employees as it begins a new fiscal year

Microsoft officials are not commenting on rumors that the company will lay off a small number of employees following the 1 July beginning of its new fiscal year, although online reports and blogs frequented by Microsoft employees indicate that those cuts could already be under way.

In response to a 6 July query on the blog Mini-Microsoft, where Microsoft employees—or those posing as employees—often post about the latest internal machinations and gossip, a number of comments suggest there would be layoffs in the marketing and sales groups. “I can confirm that an entire team in CMG (Central Marketing Group) were let go today,” one anonymous commenter said. “I’m not sure how senior management (Steve B.) can be allowed to remain in office when his response to the billion-dollar Kin failure is to lay off hardworking employees.”

Shown The Door

“Got shown the door,” another wrote. “Was E/110 last review, received performance award last fiscal, nominated this fiscal. Stunned.”

With Microsoft declining to issue an official statement about the matter, however, confirming the full scope and timetable of any layoffs is difficult.

Sites such as TechFlash have cited anonymous sources as saying any layoffs will be relatively small in number, certainly in comparison to the more than 5,000 employees that were officially axed throughout the course of 2009. The Wall Street Journal said a “person familiar with the matter” indicated that the layoffs will be “consistent with small reductions in staff the company has done in the past.”

Microsoft added nearly 2,000 positions in the first quarter of 2010, a spokesperson told eWEEK. That suggests the company is continuing with a broader strategy of reorienting its divisions to meet the challenges of the tech landscape, shedding employees and projects in the process.

In 2009, as Microsoft wrestled with reduced revenues as the result of the global recession, that reorientation involved discarding many underperforming and legacy projects—such as YouTube competitor Soapbox—and concentrated on flagship platforms such as Windows and Office.

5000 Employees

In January 2009, Microsoft announced plans to lay off 5,000 employees. CEO Steve Ballmer later sent a company-wide e-mail stating 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.”

In the words of a Microsoft spokesperson in September 2009, the cuts were made to “reduce costs and increase efficiencies” and the company was “taking necessary actions to realign our resources [with] our top priorities.”

Since then, a slowly reviving economy and the marketplace success of Windows 7 have improved Microsoft’s revenues; with that in mind, if Microsoft is indeed making small cuts to its current ranks of 88,180 employees, it’s likely more of a strategic move than a response to economic necessity.