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May 5, 2009 7:52 AM PDT

Microsoft sends second wave of layoff notices to 3,000

by Ina Fried
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Microsoft on Tuesday notified more than 3,000 workers that it was eliminating their jobs.

The software maker said in January that it would cut up to 5,000 jobs over the next 18 months. It made 1,400 cuts at the time. With the second wave of notifications on Tuesday, Microsoft has cut nearly all 5,000 jobs already.

Although it didn't announce further layoffs, the fact that the company has already made nearly all the reductions under the January plan means further job actions will have to come under a new round of cuts. In a memo to Microsoft workers, CEO Steve Ballmer left the door open to further action.

"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," Ballmer said in the memo, which was seen by CNET News.

While the positions cut in January were more U.S.-centered, the cuts announced Tuesday were split roughly evenly between U.S. and international workers. The cuts were across the company in terms of job type.

"As part of the plan we announced in January to reduce costs and increase efficiencies, today we are eliminating additional positions across several areas of the company," Microsoft said in a public statement confirming the cuts. "While job eliminations are always difficult, we are taking these necessary actions in response to the global economic downturn."

The company still plans to hire 2,000 to 3,000 workers this year in some growing areas of focus, including its online services business.

During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina.
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by Random_Walk May 5, 2009 8:27 AM PDT
I wonder if the laid-off workers will be allowed first refusal at equivalent jobs in the alleged growth areas?

Also, are the cuts being taken out of the FTE, or out of the contractors (and if it is FTE, there may be a bigger story in how much attrition may be happening among the contractors, since they are often not counted in layoff numbers, but are usually the first to get the axe in any department where budgets get distressed).
Reply to this comment
by ralfthedog May 5, 2009 8:49 AM PDT
I am sure they are given the right to apply for the jobs (If any exist). My question is, "Are they covered by the no compete clause?" It would be sad if they could not take another job because of their contract with Microsoft.

I do not like Microsoft. I very much do not like the products the sell. The people who work for Microsoft are people and I hope they get jobs that do not involve upselling fries. That said, Working the IT department at McDonald or Walmart might not be that bad.
by Vegaman_Dan May 5, 2009 9:02 AM PDT
Contractors have been long gone from the campus. Most contract positions were elminated more than a year ago. This 3,000 number was expected and planned. It completes the number of total layoffs to the approx 5,000 number announced in January. There are no more expected layoffs and Microsoft has not announced any plans for future ones at this time. Anything could happen, of course.

There may be new job openings coming up in new departments as well. Times change.
by Renegade Knight May 5, 2009 10:37 AM PDT
@ralfthedog

The no compete clause orginated with business. If I sell you my Donut shop, and then take all my customers across the street to the My new Donut Shop I've just cost you a lot of money, and I still have my busines.

It never intended for employee though it got forced into the mix. Courts tend not to look at the no compete clause with kindness when it comes to employee. For one thing they don't get paid enough to sit on their but and not work if they do get laid off if they have one of those clauses.
by Patm64 May 7, 2009 7:29 AM PDT
If the Microsoft FTE received a severence, they would have to pay it back completely prior to rehire.

Regarding the contractors, a contractor was hired in my department prior to my layoff. That happenned in several areas... they are not the first to go at Microsoft.
by WDS2 May 5, 2009 9:05 AM PDT
Just think of the money companies could save by getting rid of all these expensive executives and offshoring their jobs to India or China. I am sure there are many cheap MBAs overseas who can do a better job at transferring even more jobs overseas at a faster pace than the current crop of US executives.
Reply to this comment
by David Dudley May 5, 2009 10:03 AM PDT
This reminds me of Mark Hurd of HP infamy laying off thousands and then taking 24 million dollars in compensation. Talk about a subhuman piece of crap that needs some hardcore justice exacted upon him. If everyone one of those laid off employees had a chat with him, he'd have a true understanding of the impact of his decisions.
by Renegade Knight May 5, 2009 10:39 AM PDT
When you hire pedigrees and not talent you do have to pay more. For ever pedigreed executive there are dozens upon dozens of folks just as talented who would work for less.

The problem is a lack of skill (or interest) of the pedigreed board in finding them. That's becasue many of them are stuck under a glass cieling a couple of floors down.
by getwired May 5, 2009 11:54 AM PDT
Alas - don't expect this or any round of MS layoffs to hit "mid-level management" or executives very hard. They only like to fire the individual contributors.
by myles taylor May 5, 2009 9:26 AM PDT
Ballmer finishes up the memo, then hops onto his private jet......blah blah blah. Executives are grossly overpaid. Talk about sacrifices.
Reply to this comment
by gertruded May 5, 2009 9:35 AM PDT
Incompetent management always leads to workers getting the shaft.

Microsoft, How is that outsourcing working for you? Maximizing short term profits always leads to trouble.
Reply to this comment
by brian.lee May 5, 2009 9:53 AM PDT
"Microsoft, How is that outsourcing working for you? Maximizing short term profits always leads to trouble"

Short term gains in IT always leads to long term trouble. Some times you're losing more than just the bottom line... for example what is the price on consumer confidence? If you're customers aren't confident with your product how are you going to buy that back you can't buy consumer confidence it's earned.
by chuck_whealton May 5, 2009 10:02 AM PDT
Maybe a better idea would be for Mr. Balmer to take a pay cut so these innocent people can continue making their mortgage payments. But hey, we wouldn't want Micro$oft's upper management to go through the same heartache that the rank and file goes through. That might be a sign of REAL leadership.
Reply to this comment
by jdzions May 5, 2009 10:40 AM PDT
Ballmer makes $1.4 million/yr in TOTAL compensation from Microsoft. (Check out their public filings; that's a well-known number.) Chopping his pay to zero might save, oh, 9 or 10 jobs. Not even meaningful as a symbol.

Setting that aside for a moment, part of a manager's job is making sure a company declines to continue to employ people who aren't good employees. People who significantly underperform other employees, that sort of thing. During hard times, the bar for "aren't good employees" gets a little higher. If that didn't happen, people would be howling for Balmer's head for being a lousy manager.

Learn something of how real business works before you go whining about it.
by sciontcya May 5, 2009 11:25 AM PDT
@JDZIONS,

Salary is one thing - Jobs gets $1 a year.
He's a billionaire, as is Ballmer.
He didn't get there on 1.4M a year.
Puhleez.
by monkeyfun14 May 5, 2009 1:00 PM PDT
@scion

Jobs also has huge stock options within Apple which easily make him a yearly salary.
by seven7dust May 5, 2009 10:34 AM PDT
if they only had shut down silly projects like the Zune
and focused more on profitability of the XBOX and Windows mobile divisions
not to mention Live search and services
this wouldn't have happened !
Greed is Microsoft's Biggest enemy !
Reply to this comment
by Vegaman_Dan May 5, 2009 11:16 AM PDT
Nice spin, but in the end, it's just FUD.

Seven7dust, you are your own worst enemy when it comes to credibility and respect.
by Dalkorian May 5, 2009 2:46 PM PDT
Care to explain how the xbox differs from the zune in that way? Both are "me too" products priced as loss leaders.

Don't get me started on the "brilliance" of paying people to use that trashy gutter live search junk.
by jessiethe3rd May 5, 2009 5:34 PM PDT
Xbox actually is pulling profit - it's online branch is pulling in revenues.
by SkateNY May 6, 2009 12:05 AM PDT
Microsoft's Commander-In-Chief is no only an embarassment to MSFT investors, but a clear failure.

The problem with Microsoft is not their products, their management, or their proferred vision.

The problem lies within their followers, their acolytes, their loyal supporters who continue to pray at their altar despite their several and dramatic failures.

I don't care that people don't like what I have to say. What I do care about is that people continue to hurt their better interests by denying what is so obviously true to so many people.
by BogusBasin May 5, 2009 10:50 AM PDT
Bleeding money because they sell crap. Rushing the Win7 fix out the door. Giving away beta versions to keep you hanging on while they push development through the machine like play doh. Meanwhile, the machines they use to show how much money you save over buying a Mac aren't doing so well in consumer reports. Death to Microsoft! Amen

http://www.appleinsider.com/articles/09/05/04/macbooks_sweep_latest_consumer_reports_scores.html
Reply to this comment
by Vegaman_Dan May 5, 2009 11:20 AM PDT
@BogusBasin:

An excellent example of using misleading information to spin out tidbits to forward your agenda... which makes no sense at all.

Giving out beta products for end users to try out? Perhaps you've heard of this little company called Apple that does the very same thing? Why are you condemning Microsoft for doing what Apple does? Do you feel that Apple is a failure as well for doing the same thing as Microsoft? Interesting thought there- normally you support all things Apple, but ... well, you seem to have issues with allowing customers to try out products before they buy it. If you're against Microsoft for doing this, then you are against Apple as well.

The article you linked to has nothing to do with Microsoft. It's a consumer reports score on support and satisfaction surveys on *hardware*. Perhaps you overlooked that? Microsoft doesn't build PC's- Apple does. It's a good attempt at FUD, but it fails if someone actually looks at the article in question.

Better luck next time.
by KickinA May 5, 2009 11:23 AM PDT
Last time I checked MS was not bleeding money, get your facts straight.

MS is ranked the 3rd most profitable company in the US, only 2 companies make more companies, and they are oil companies.

http://money.cnn.com/magazines/fortune/fortune500/2009/performers/companies/profits/
by gertruded May 5, 2009 12:17 PM PDT
vegaman, the MS shill, trikes again. I don't even read you posts anymore.
by pithenumber May 5, 2009 1:05 PM PDT
@gertruded
what vegaman said is perfectly true though

Apple has open Betas just like many other tech companies
by Dalkorian May 5, 2009 3:00 PM PDT
@gertruded - Now now, Dan isn't the worst out there. Yes, he has ... um ... "software preferences" that I don't share and I don't fool myself into thinking he agrees with my opinions either, but he's one of the more rational ones (well, until Peng shows up :)). Hang around a few of these articles and you'll see what I mean - there are a few others that are just out there. I won't dignify them by naming them, but trust me when I say when you run across one you'll know.

And Dan does have a point - having a beta in the hands of the public isn't really a bad thing. Allow the users to help scare out the bugs in the software before releasing it to the wild. This is typical for a lot of software development and not an M$ specific thing.

BogusBasin should have brought up WGA though - that shuts up most M$ apologists pretty darned quick.
by Vegaman_Dan May 5, 2009 6:12 PM PDT
@gertruded wrote:

"vegaman, the MS shill, trikes again. I don't even read you posts anymore."

That is indeed an option you may choose, however you did comment on my post, so you must have read it.... ;)

Don't worry, it's no big deal. Laugh a little, it does you good.
by Magallanes May 5, 2009 11:12 AM PDT
Soon MicroCurrySoft.

:-P
Reply to this comment
by dennisl59 May 5, 2009 11:32 AM PDT
No wonder they cancelled the Company Picnic...they had to save $$$ to pay severance. FUBAR!
Reply to this comment
by Ted Miller May 5, 2009 12:42 PM PDT
They already know that Windows 7 is junk ware. they are preparing ahead of time for the terrible pinch to come.
Reply to this comment
by monkeyfun14 May 5, 2009 1:01 PM PDT
Windows 7 is junk ware really now?
by pithenumber May 5, 2009 1:05 PM PDT
have you tried win7?
if you did, you will know it is awesome
by kcotham May 5, 2009 2:40 PM PDT
@monkeyfun and pithenumber
Windows 7 isn't "awesome". It's merely a slimmed down, less annoying version of Vista. While it is an improvement over Vista, this isn't really saying much.
by kcotham May 5, 2009 2:42 PM PDT
@pi and monkey
Windows 7 is merely a slimmed down, less annoying version of Vista. It isn't "awesome". It's an improvement over Vista, but that isn't really saying much.
by Angmarr May 5, 2009 4:28 PM PDT
@ kcotham

Do you really expect anyone to take your comments seriously, when your apple fanboy bias goes above and beyond of some other apple fans when looking at some of your other comments ... sad
by kcotham May 5, 2009 4:48 PM PDT
@angmar
Personal attacks don't do anything to demonstrate your point of view. I've not been engaging in "apple fanboy" rhetoric. I have merely been correcting falsehoods by the likes of you, monkey, and pi. If you would actually read what I have read, I've been touting alternatives to Windows, a subtle yet important difference.
by Vegaman_Dan May 5, 2009 6:16 PM PDT
If you look at the huge demand that Win7 had when the first beta was released that caused Microsoft to hire out to other companies to help with the hosting of the ISO images, and even now the strain the system is taking in the amount of downloads for the RC1 version, then I would be hard pressed to say that people think it is 'junk ware'.

But to be fair, install it on a system and give it an honest unbiased chance. You might be surprised. Unless you do, then you really don't have much to base your opinion upon.
by jtjt145 May 5, 2009 3:06 PM PDT
WINNERS OF PRO-MIRO$OFT COMMENTING:
And today we are releasing the winners of the competition for PRO-Micro$oft commenting:

1st price monkeyfun14
2nd price Vegaman_Dan

The 2 venerable contributors have been enlisted on the companys payroll as long-term members.
The winners will get a handshake from the current Micro$oft chairman Steve Ballmer, together with a complementary chair for the annual Redmond chair-throwing competition.
:-)

On a more serious note: I do feel sorry, for the poor guys getting the sack
Arthur
Reply to this comment
by Vegaman_Dan May 5, 2009 6:22 PM PDT
SECOND PLACE? You expect me to settle for second place behind Monkeyfun14??? I will not stand for this injustice! I demand to be taken seriously and take my place as #1!

Disclosure: While I do work *at* Microsoft's campus, I do not work *for* Microsoft. I do not draw any payment from Microsoft, and indeed my job benefits when Microsoft products fail as my company is responsible for cleaning up afterwards. Hows' that blow the Apple fanboys' minds? I make my money from Microsoft failing, and yet I still support Microsoft prodcuts. Go figure.

But hey, let's all have a laugh now and then. Life is too short to get upset over internet postings. Go ahead and type out your long diatribe full of hate and vehemence... but don't click on that 'submit' button. Go have some ice cream instead, come back and ask yourself if you really want to be known for making that sort of post. Go ahead and click 'cancel' and you'll feel better for it.
by sargess25 May 6, 2009 10:25 AM PDT
veggie_man says: ".... indeed my job benefits when Microsoft products fail as my company is responsible for cleaning up afterwards"

lol ... and how you find time to post here? you must be up yer neck full of ***** from Windows failures, crashes, viruses etc... working at M$ campus? one will never be short of work
by v1m May 5, 2009 4:33 PM PDT
This is what the end of a credit bubble and a Wile E. Coyote economy looks like.

Get used to it. In many ways, show's just starting.
Reply to this comment
by lenins May 5, 2009 4:34 PM PDT
how low can microsoft go!!! stupid and a low life worm. this hit the bottom.
let's email everyone and tell them-you are fired!!1
emailing a employee and tell the employee, you are fired, no money,ni insurance,nothering.
not even a kiss on the cheek.take this too your cold heart. i hope and pray.you will not sleep.
Reply to this comment
by Vegaman_Dan May 5, 2009 6:24 PM PDT
Severance packages that include health benefits, cashing out of your personal time off, stock options, and use of their outplacement / job placement services? Doesn't sound like Microsoft is making it too hard on the terminated positions, and is in fact going out of their way to do what they can to help.
by vmlenigma May 5, 2009 5:05 PM PDT
LOL I guess too many people are choosing to Pay the Apple Tax versus getting buying a can of worms dressed as a PC
Reply to this comment
by FS1982! May 5, 2009 5:31 PM PDT
Microsoft is really disappointing me. Not so much because of the layoffs but it just does not seem like they know what the f they are doing. Their commercials are stupid, seems like there has been very little focus on Xbox, and it seems like there is no passion with their products...at all.
Reply to this comment
by SkateNY May 5, 2009 11:47 PM PDT
Microsoft is a company in decline. It's top managers, supporters, fanboys, and investors are all in denial about this.

Their most recent OS was and remains an abysmal failure. Their attempt at competing in the MP3 market is a disaster, no matter how many people tell us that they love their Zune. Their "loss leader" in game consoles is just that...a leader in losses.

Want proof? Look at the stock price for the past five years...at least five years.

MSFT investors are desperate. They'll say and do anything to make others believe that the company is doing as well now as they were doing before they were adjudicated by the US Department of Justice as violating the Sherman Anti-trust Law in restraint of trade.

They've lost a great deal of their investments over the past ten years. They're so desperate that they need to tell themselves -- and anyone who will listen -- that this is a great company.

Sorry, but as is true in the rest of the real world, what has Microsoft done for anyone invested in them lately? The soft answer would be "nothing." The truth is that they've damaged their investors through bad judgment, poor management, and malfeasance.

What they've done is move a great deal of their previously loyal customers to Apple and Linux. And a large percentage of them who haven't made that move are looking into it.

It's a sad story. With so many resources, the best they could do was barely maintain their core products...Windows and Office. Not enough. The rest of the tech world is passing them by, and they don't seem to have a clue.
Reply to this comment
by gertruded May 6, 2009 4:42 AM PDT
Yes skateNY, I have to agree. The Microsoft decline is really to no one's benefit though. It would be much better they were still putting out great products. Many many people are and will get hurt.

I am afraid that they are following Kodak, Xerox, General Motors, General Electric, Citi Group, Sears, Swift, and many others into decline. It seems to be the American way to trash great companies with poor management. GE is the only remaining company on the original Dow stock index.
by GOMad May 6, 2009 2:41 AM PDT
Hello Guys,

I am just reading your comments about MS for long time and though to give you something back.

Microsoft is a BRAND, which you can dreamt about to use their product, work for them, use their idea ...BLA(100...). Now there is a economic down in this earth but still Microsoft finds a way to keep their customer(You are also the one) happy. MS do the business as per customer needs and they just do not manufacture any product which customer is not aware off. Remember the biggest dream of Bill gates - He wants windows OS running in every home in this earth and I would say he has achieved almost 70% of his dream another 30 % is just only to convience users who uses Pirate software of MS and claims that they do not like MS product and they compare with other product companies. Think like something, where evrybody can use not only rich people like You.

I like Microsoft strategy in terms of Long term sustain. Whatever they do is for us , Yes I also feel sad about the layoffs but nothing can be done at this situation. Think like if you are drving a bus, which has more than 100 passangers and face one situation where you have to kill 5 people to save more number of passangers, in that case, I think you will also take the same steps..

I think, you now understood MS very well.
Reply to this comment
by saamson May 6, 2009 7:21 AM PDT
Bravo Microsoft. Good job taking advantage of the economic news of the day and laying off thousands of people when your company is still the most profitable global software company. Simply put, your products are 3rd tier and your greedy organization should be ashamed of itself.
Reply to this comment
by soulmission May 6, 2009 9:26 AM PDT
Microsoft is one of the worlds greediest corporations. They are a huge supporter of outsourcing as evidenced by Bill Gates testifying to increase the H1B visas. I'm sure most of the layoffs were Americans losing the ability to pay their bills and support their family. It needs to stop or we will "all fall down" See this article on their outsourcing : http://www.bloomberg.com/apps/news?pid=20601109&sid=afB9Q1A5.qyI&refer=news
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by NoWeCant May 6, 2009 10:15 AM PDT
About time H1B was brought up...those evil _legal_ immigrants.
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About Beyond Binary

During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft.


Beyond Binary is a look at how technology is changing our lives and the people behind all that life-changing stuff, with an extra emphasis on that which emanates from Redmond, Wash.

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