Microsoft Corp.: Layoffs on the Horizon?

Jan. 21, 2009
Company mum on reports that cutbacks could include layoffs.

The weakened economy has computer software giant Microsoft Corp. searching for ways to reduce costs. The 2008 IW 50 Best Manufacturer is planning cutbacks that could include companywide layoffs, according to a Jan. 15 report in The Wall Street Journal.

The Journal, citing sources familiar with the company's plans, reports that an announcement could come on Jan. 22 when the company issues its second-quarter results.

When the Redmond, Wash.-based company released its first-quarter report in October, the company said it would explore cost-cutting opportunities.

"In the near term, we're reassessing our business plan and pulling back spending in lower priority areas," said CFO Chris Liddell in an October earnings transcript. "As a result, better than our guidance is a $400 million to $500 million decrease in operating expenses."

Among the potential changes cited by Liddell included the company's hiring plans, headcount growth adjustments, lower marketing expenses and travel and vendor services cuts.

Microsoft Corp.
At A Glance

Microsoft Corp.
Redmond, Wash.
Primary Industry: Computers & Other Electronic Products
Number of Employees: 91,000
2007 In Review
Revenue: $51.1 billion
Profit Margin: 27.51%
Sales Turnover: 0.81
Inventory Turnover: 8.21
Revenue Growth: 15.45%
Return On Assets: 20.21%
Return On Equity: 30.71%

Microsoft ended its first three fiscal months with revenue increasing 9% over the year-earlier period to $15.06 billion and profit reaching $4.4 billion, or 48 cents a share, compared with $4.3 billion, or 45 cents a share, during the same period last year.

The Seattle Post-Intelligencer reports that it has reviewed a PowerPoint presentation showing Microsoft already expects to delay expansion plans in the region and that it won't renew many building leases when they come up for renewal between 2009 and 2010.

Meanwhile, the Journal reports the appointment of Carol Bartz as Yahoo Inc.'s new CEO could improve chances of a Microsoft-Yahoo partnership. The two companies discussed a Web-search alliance last year after Yahoo turned back Microsoft's takeover attempt.

Update: Microsoft Cuts up to 5,000 Jobs. Click here for full story.

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About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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