Microsoft Tuesday laid off several thousand employees and said it has almost finished eliminating 5,000 positions as part of a $1.5 billion cost-cutting effort. But Microsoft left the door open to additional layoffs, which suggests that company officials expect the weak economy to continue gnawing away at revenue.
In an e-mail sent to Microsoft employees, Microsoft CEO Steve Ballmer said Microsoft will continue to monitor the impact of the economic downturn on the company's business and will cut further jobs if necessary.
Microsoft in January revealed plans to eliminate 5,000 jobs in research and development, marketing, sales, finance, legal, human resources and IT operations by June 2010, the first companywide layoff in its history. At the time, Ballmer warned Wall Street analysts that the technology industry faces a "once-in-a-lifetime set of economic conditions" and said the economy was in the process of "resetting to a lower level of business."
In Microsoft's most recent quarter, profit fell 32 percent and overall revenue fell 6 percent, marking the first time in company history that quarterly revenue experienced a year-on-year decline.
Client division revenue fell 15.4 percent during the quarter and has declined for three straight quarters, but Microsoft hopes the launch of Windows 7 will counteract this trend. In the coming year, Microsoft will also launch Office 2010, Exchange 2010, and potentially a new search offering.
Anonymous Microsoft blogger Mini Microsoft published the text of an e-mail that Microsoft HR Chief Lisa Brummel purportedly sent Tuesday to managers, asking them to minimize e-mail volumes and to answer employee questions face-to-face or via Live Meeting instead of via e-mail.
In February, Microsoft's HR department sent out letters to 25 laid-off workers informing them that they'd been overpaid in their severance packages and asking them to repay the difference within two weeks, but then reversed course and said it wouldn't seek reimbursement.