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Microsoft's job cuts 'complete' -- for now
Thursday, November 05, 2009 2:55 PM


(Source: The Seattle Times)trackingBy Brier Dudley, Seattle Times

Nov. 5--Microsoft reminded Seattle on Wednesday that when it rains, it pours sometimes.

The software giant said it's cutting more jobs than expected in a broad, cost-cutting program that began in January, the first major layoffs in its 34-year history.

The company said it was ahead of schedule and had cut 5,800 jobs. That's up from the 5,000 it had planned to cut by 2010.

At least 1,400 jobs have been lost in the Puget Sound area, including 200 Wednesday.

Microsoft spokesman Lou Gellos said the layoff program announced at the start of 2009 is "complete," but more cuts could come as the company continues adjusting to economic conditions.

Wall Street may appreciate the approach and punctuality, but more uncertainty is left in a region where Microsoft has been a bulwark during previous downturns, and people are still reeling from Boeing's recent decision to begin building jetliners in South Carolina.

Microsoft's business appears to be on a roll. The stock jumped back to the high $20s last month after the company reported Windows and Xbox sales were better than expected. Shares closed up 2 percent Wednesday to $28.06 after the layoff news.

But CEO Steve Ballmer isn't cheering as much. During a visit Monday to South Korea, he said he's not expecting tech spending to return to pre-downturn levels.

Gellos reiterated the cautious outlook Wednesday, saying Microsoft will continue to make whatever adjustments are necessary.

"If that means we focus on different businesses or take care of employee head-count issues, we would do that."

It's a new tone for a company historically loathe to use the word "layoff." But new executives and economic conditions have made efficiencies and cost-cutting a more public mantra at the largest software company.

Some employees suspected cuts were coming this week. The Nov. 4 date was accurately predicted by commenters on the Mini-Microsoft insider blog, who noted that was the day the human-resources department had reserved numerous conference rooms across the campus.

Still, the pink slip surprised employee Don Dodge, a Boston-based business-development director. "Totally blindsided," he said.

Dodge, 52, is an avid social networker and regular at startup conferences. Word spread among tech enthusiasts, and he said he was discussing jobs with Amazon.com, Cisco, Dell and others by the end of the day.

He is losing more than his job. He's also missing out on stock awards he would have received if Microsoft waited a few weeks, until his five-year anniversary Nov. 24.

"I'm already over it and looking forward," he said.




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