Free Newsletter
Microsoft slashing jobs, mobile facing deepest cuts
Free newsletter via e-mail
Tools
Microsoft announced it will make the most significant job cuts in the company's 34-year history after releasing dismal second quarter financial results. The software giant plans to eliminate up to 5,000 jobs--about 5.5 percent of its workforce--over the next 18 months after net income dropped to $4.17 billion, 11 percent off year-ago totals. "We are certainly in the midst of a once-in-a-lifetime set of economic conditions," Microsoft CEO Steve Ballmer told investors during a Thursday conference call. "Our model is not for a quick rebound. Our model is things go down, and then they reset. The economy shrinks."
According to Microsoft, the job cuts will target positions in R&D, marketing, sales, finance, legal, HR, and IT--1,400 jobs were eliminated Thursday. Microsoft adds the initiatives will reduce its annual operating expense run rate by approximately $1.5 billion and reduce fiscal year 2009 capital expenditures by $700 million. ZDNet reports that Microsoft's Entertainment and Devices unit, which is responsible for its Zune, Windows Mobile and Xbox products, is suffering the brunt of the first-wave job cuts--the impact of the employee losses on the E&D product roadmap is presently unknown.
For more on Microsoft's job cuts:
-read this ZDNet article
Related articles:
Microsoft trumps Google on Verizon search deal
Microsoft inks ad partnership with Quattro Wireless
Comments
Posted by SkateNY | January 26, 2009 - 1:59am
I don’t doubt that many or even most Zune owners are satisfied with what they have. Here’s my thing: Apple dove into the MP3 market when that market was already well on its way to maturity. The iPod quickly made a big splash, and iTunes has played no small part in helping the iPod acuire a 70% market share. Apple did not engage in illegal, monopolistic business practices in order to achieve that level of prominence; nor did Steve Jobs hypnotize buyers, steering them towards the iPhone.
When the iPhone was released in October of 2001, it succeeded during a recession caused by the terrorist attacks of 9/11. If the current economic climate adversely affected the Zune and other consumer products, then it stands to reason that it also adversely affected iPod sales. Yet, Apple reported a growth in iPod sales for the most recent quarter, versus a 54% drop in Zune revenues. How much better would the iPod have faired this quarter without the deepening recession?
I believe that Microsoft and its investors need to re-evaluate the Zune with regard to how it affects other products, and how it affects shareholder interests. If I’m a Microsoft competitor — and I don’t believe that Apple and Microsoft compete in the sense that they appeal to very different groups of customers — then I truly hope that Microsoft continues to throw money and other resources at the Zune.
Comments (1) | Post a comment