Microsoft planning big layoffs for January?
Mark January 15 in your calendar: Rumors of layoffs at Microsoft peg that as the day the bad news will come.
The latest to report on the possibility of layoffs at the software giant is the blog Fudzilla, which puts the number of job cuts at 15,000, or nearly 17 percent of Microsoft's worldwide operations. The January 15 date is a week before Microsoft's second-quarter earnings report, scheduled for January 22.
Microsoft also has a briefing for financial analysts planned for January 8 at the Consumer Electronics Show in Las Vegas, with the headliner listed as Robbie Bach, president of the entertainment and devices division.
(Credit:
Microsoft)
Those purported layoff numbers are up from earlier rumors, which suggested that 10 percent of the company's employees would lose their jobs.
Fudzilla sees the biggest hit coming for the MSN unit, where Yusuf Mehdi recently took over as marketing chief while the company continued to look for an executive to run its overall online services group:
So far, we haven't managed to confirm what departments or regions will be hit the worst, but we're hearing that MSN might be carrying the brunt of the layoffs. We're also hearing rumors about the possibility of somewhat larger staff cuts at Microsoft EMEA (Europe, Middle East and Africa).It's unlikely that Microsoft will be laying off a lot of people in departments and regions that are doing well, and considering the recent upturn in console sales, we have a feeling that at least most of the people working in the Xbox 360 departments will be pretty safe.
Wall Street veteran Henry Blodget says the target areas mentioned by Fudzilla make sense, but not the high volume of job cuts:
Unless Microsoft's business has been absolutely crushed in the past two months, there is no reason for the company to suddenly cut this much cost. Microsoft's margins are still fine, and much of its revenue is generated from multi-year contracts (and is therefore unlikely to see a massive intra-quarter hit).
In October, word leaked out of Microsoft that it would be closing its MSN Groups service on February 21, to be replaced with Windows Live Groups.
Blodget sees potential for a restructuring in Redmond that would fit into the long-running, on-again-off-again Microhoo saga:
The only way we could see Microsoft laying off this many people is if the company decided to eliminate business units. And if Microsoft did decide to restructure its business, it would likely sell rather than shut down divisions, including MSN (If Microsoft wants to get out of the consumer Internet business, which it should, the best way to do it is to spin its online operations into Yahoo in exchange for a big piece of the company.)
Jonathan Skillings is managing editor of CNET News, based in the Boston bureau. He's been with CNET since 2000, after a decade in tech journalism at the IDG News Service, PC Week, and an AS/400 magazine. He's also been a soldier and a schoolteacher. E-mail Jon. 
Those Microsoft marketing guys can all go back to making churros! YUM!
We'll see what MS has to say tomorrow, if they offer any statements.
Given the economy and the fact that MS is not immune to the downturn, it wouldn't be surprising to see some layoffs or less use of contractors and not filling every open job. The 15-17 percent seems extreme, more of a major reorganization of the company. We'll continue to track this story.
Use a search engine, this cnet story is actually old news.
You published an article based on some random post from some no-name website. It is not only incredibly irresponsible, but it is really, really unprofessional. You're just "...reporting on the various rumors..."? News reporters report NEWS, not rumors. News reporters get information from verifiable sources, not fudzilla.com.
There's no difference between fudzilla and the comment section on this story. Here's some more "news" for you CNet:
Microsoft will lay off 15% of their work force in January. Employees will be given 4 weeks to find another job in the company, or they're out of a job. I've heard it this confirmed from reliable sources.
There you go CNet. Another source for you. You can write another article about the layoff rumors.
That and MSDN are pretty much the only 2 parts of Microsoft i actually care about.
The trends and numbers don't lie... MSFT needs a shakeup, and it needs one now. Too bad they can't do the same to the upper management, but you get what you can.
The funny part is, Intel did two layoffs - in January 2007 and January 2008 (they laid off 11,000 in 2007, and at least 1500 more when it trimmed its IT department specifically in 2008).
Now I realize you Microsoft cheerleaders are all uptight about it and all, but seriously - this is normal (yes, normal!) for large corps to do on a regular basis. Marketshares shift, divisions become unprofitable and products go into maintenance mode. All of that means either the employees affected go to new projects, or they get laid off. Since it's normal even during good times, I would expect it to happen even more in the not-so-good times.
Me, I got to see one of these from the inside. It's not pretty, but sometimes it is necessary, esp. given corporate cultures in and about the tech industry. Instead of whining and ******** about how this is awful, awful news, how about looking at it like it truly is - a chance for MSFT to actually trim the fat and re-orient itself to meet market realities. As it is, (at least IMHO), Microsoft is too bloated and moribund these days to compete effectively, and its loss of marketshare in many sectors prove that. If they trimmed the fat, maybe they can shake things up a bit, and get themselves out of the mud for once...
/P
You have to be off your absolutely freaking rocker there, man. Think about exactly what area that Apple and Linux is making a dent in Microsoft's sales. It's the desktop *consumer* market. Apple doesn't even touch the business market and that enterprise market is where Microsoft is not only thriving, but growing. This is the reality of the situation.
MSN is one area that I don't see any company should be involved with. ISP/Content delivery isn't where the money or market is these days. I think MSN should go the way of AOL and Yahoo, personally.
Xbox vs Nintendo is a good comment. Keep in mind that Nintendo has just had their North American headquarters bought out by Microsoft and Nintendo does not have plans to replace it when they leave the building. I don't know where they are moving, but Nintendo's employees have not been given any notice where they can apply for work when the company moves their HQ- or closes it. It's very possible they will pull back. They don't need a presence in the US anymore for a HQ and do all their work back home. Does that mean the 5K people in Redmond who will be losing their jobs at Nintendo indicates the company is failing? No, of course not.
I agree that MSFT needs a shakeup. Most companies can benefit from that. Apple is doing that now with the start of Steve Jobs' departure. We'll see how that turns out.
Now as for the rumors of MSFT layoffs- someone better tell Microsoft that they are planning on layoffs- they are currently *hiring* people and expanding their campus by nearly half again larger. The Redmond campus alone is expecting to see an increase in 20K positions. I know this because it's my job to have to plan support for those employees. If MSFT is going to be laying off all these people, then it's will be a surprised to Microsoft as well.
That's the problem with unfounded rumors like these. When you present them with facts and reality, they simply don't stand up.
As for Nintendo, I have no idea - they're growing like crazy though, and their sales numbers show it.
If Apple ever wants to get into the enterpise market, it would mean losing the ironfisted approach they have on control over the OS and support. Enterprise customers need their hardware repaired *now*. They need overnight parts for repairs on the spot- Apple doesn't allow this and you have to send the equipment to them. I have to do this now and while I can get a part for a Dell or HP system overnight, when I have to send a laptop to Apple, it takes a week at the absolute earliest. That's going through Apple's official channels. Now there are some unofficial channels, but they don't offer the OEM warranty or support.
Enterprises are also cost concious. When they see a Lenovo laptop for $1200 and a Macbook for $2500 that is meant to do the same job, then that is not a very good comparison for the enterprise customer to make. When they add in the difficulty in support, then it simply is not an option at this time. Not at enterprise levels, at least.
This could change, but Apple has not made any indications of this in their actions or past history.
You act as if the enterprise market cares about vendor "control" of either OS or hardware (you do remember that this is the same enterprise market that happily buys things like Sun servers and Exchange, right?) Trust me, as someone who has been bringing Linux to the enterprise market (and using it once it gets there) for years now, you would be astounded at the complete and utter lack of caring from the folks who write the POs for these things.
As for your comparison of notebooks, you completely forgot all about the cycle. If I can carry a 5-6 year cycle on a laptop (instead of the average 2-3 year cycle on laptops today), then the costs amortize nicely and the price is more than worth it - let alone the lower TCO due to reliability and customer (read - business) satisfaction. Support "difficulty"? Feh - it would be but a minor change to for Apple add in the same 4-hour Gold SLA - just stock the Apple stores with the needed parts (unlike Dell and HP, who has to mostly contract such things out and maintain separate logistics chains for it).
Re: "Royal Navy goes with 'Windows for Subs'"
http://news.cnet.com/8301-13639_3-10129373-42.html?tag=mncol
The "Apple" (Windows) just do not fall very far from the "Tree" (OS/2 Warp) - Huh!
"""ironfisted"? My, don't we have a flair for the dramatic..."
Yes, but it's accurate.
"you would be astounded at the complete and utter lack of caring from the folks who write the POs for these things."
Oh, don't I know it. It's frustrating having to tell some admin that the Apple laptop that their executive is going to take 1-2 weeks to be repaired when everyone else's system that is on the standards list is fixed that day or the next if the parts are local. And then there's the recent trend for the ignorant to buy netbooks instead of laptops citing the price of $4-600 is far less than the $1200-2000 for a laptop. Then they complain it won't run their apps or is slow. Having the power of a purchase order seems to lobotomize a lot of people into buying the latest and greatest shiny object.
There's a reason why business class laptops are simpler with fewer bells and whistles than consumer models- they are built to last for the entire duration of the warranty. Consumer models come with a one year warranty typically whereas the business models have three.
"As for your comparison of notebooks, you completely forgot all about the cycle. If I can carry a 5-6 year cycle on a laptop (instead of the average 2-3 year cycle on laptops today), then the costs amortize nicely and the price is more than worth it - let alone the lower TCO due to reliability and customer (read - business) satisfaction. "
I didn't forget it at all, and in fact is a very critical reason why I do not believe Apple will do well in the enterprise market. Businesses need that extended warranty. Again, consumer systems come with a one year and business class with a three year. Anything beyond that is pointless as the tech has advanced enough to make a three year old laptop obsolete for the current tech levels. Apple offers a very limited warranty and doesn't offer nowhere near that which HP, Dell, Toshiba, and Lenovo do for on site repairs, parts availability or service. That's just the way it is.
Right now if an exec has a Sony, Acer, or Apple laptop with a failed hard drive, they can expect to be down for 1-2 weeks for the parts to arrive or to have to send the entire laptop back to the OEM for repair depending on their repair process.
If they have an HP, Dell, Toshiba, or Lenovo, then the part can be obtained overnight.
Think about the total cost of ownership then. You must include downtime in that equation. With those standard laptop OEM's, you're looking at 1-2 days max. For Apple, Sony, and Acer, you're looking at 1-2 weeks. That's a long time to have some exec down without a laptop. That's simply unacceptable in a business environment. You then have to start carrying spare systems just to make up the difference. Is that $2500 Apple laptop that is down for two weeks leaving the person stranded really worth that much more over the $1200 laptop that is back up and running the next day? What is that person's time worth? Suddenly the expenses skyrocket and it just isn't that good of a deal at all. The total cost of ownership becomes exponentially higher.
That's a hard and real situation that happens daily. It could easily be improved if Apple allowed others to perform service on their systems or had a parts distribution process for that purpose like the other OEM's in the industry does. Then you could have quick turnaround times. Right now they simply aren't showing any indication of moving towards that model. And until they do, they just won't be considered a serious enterprise provider.
Commander Spock: Is this the first time you haven't talked about OS2 in a comment? is this REALLY Commander Spock? :)
Hey " Vegaman_Dan"! Happy New Year to ya. It seem you missed it (grin):
Re: "The "Apple" (Windows) just do not fall very far from the "Tree" (OS/2 Warp) - Huh!"
But you're assuming that the rates are equal. Thing is, they're not... the MTBF numbers for Apple products are far higher than that of the typical (and usually cheap) Dell or HP product.
"Apple offers a very limited warranty and doesn't offer nowhere near that which HP, Dell, Toshiba, and Lenovo do for on site repairs, parts availability or service. That's just the way it is. "
One word: AppleCare. Google it sometime. ;) All it would take to make it enterprise-ready would be for the Apple stores to get stocked with extra parts and a few techs... the infrastructure is already in place.
@ Seaspray: when you're finished with making up situations and accusations, please let us know ;)
that is unless they acquire Yahoo.
How about trying to keep hold of what they have, and trying to prevent any further slippage? Over the past two years, their marketshare in Windows overall has dropped by 5%, and the curve isn't a flat one...
Umm ... that would be January 14th in Microsoft-speak, me-thinks.
And Vista is a total joke!
Glad to see the Karma train is coming into the Bellingham station. RIP Gates and tec thugs.
Regarding Google docs- if you read the terms of service, Google reserves the right to do whatever they wish with the content, including copying/selling/marketing it to others without your consent or even your knowledge. While that may not be a big deal to an individual for personal use, it becomes a legal nightmare for any sort of business use.
http://www.realmeme.com/roller/page/realmeme?entry=internet_inflection_point_microsoft
The layoffs are going to be big.
The fall in e-commerce traffic for Christmas was not an anomaly.
Since when do you report on rumours and cite actual numbers with a title such as Microsft plans BIG layoffs when there is no proof whatsoever.
CNET is a joke..
"NO LAYOFFS @microsoft
Yes, Executives are looking for measures to cut cost. And that can be done without any layoffs. Current hiring rate is slow at MS and considering the natural attrition, we will have lesser workforce at the end of FY09.
We are not immune to recession and our bottom line will see a hit for few quarters. We expect a full recovery by FY10 Q3. We are very optimistic that this recession is an opportunity for us and we will play our cards well. Urge all Microsoft employees to stay focus and keep doing the great work. You will hear more from SteveB soon on his plans. Thank you !!"
Pity, though... MSFT can really stand to clear out a lot of institutional dead-wood...
- by nutso101 January 2, 2009 6:04 PM PST
- Don't we need these workers expertise in maintaining and developing technology in the future?
- Like this Reply to this comment
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- by Commander_Spock January 2, 2009 8:49 PM PST
- Re: "Don't we need these workers expertise in maintaining and developing technology in the future?" What the answer is going to be is - Why pay for "one" at $75,000 per year when you can get "10" for the same price.
- Like this
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