May 06, 2009

With Tuesday's second round of layoffs, Microsoft had made almost all of the 5,000 job cuts it had planned to make, including 1,200 local workers who were notified yesterday.

With Tuesday's second round of layoffs, which included 1,200 locally, Microsoft has made almost the entire planned 5,000 job cuts announced in January.

But there could be more coming. In an e-mail to all employees Tuesday, CEO Steve Ballmer left open the possibility of more layoffs.” As we move forward, we will continue to closely monitor the impact of the economic downturn on the company and, if necessary, take further actions on our cost structure including additional job eliminations," he said.

Ballmer did say Microsoft was mostly done with the 5,000 cuts announced Jan. 22. That same day, the company eliminated 1,400 positions, leaving 3,600 to face the chopping block between then and July 2010.

In Tuesday's round, the company declined to say how many were let go, but said half the cuts were domestic and half were outside the U.S .It also confirmed that 1,200 positions will be eliminated locally, the number recorded in a Worker Adjustment and Retraining Notice (WARN) sent Tuesday to the state's Employment Security Department.

I wouldn't be surprised if they announced further cuts next fiscal year. That starts July 1," said Matt Rosoff, an analyst at independent firm Directions on Microsoft in Kirkland."I'm speculating, looking at the way the numbers are going. Ballmer's memo mentions the possibility as well," Rosoff said.

The cuts, the first major layoffs in the company's history, have represented a sea change for Microsoft, which has aggressively grown in the past decade, from about 31,500 employees in 1999 to more than 95,000 this year. The company said it still intends to create 2,000 to 3,000 new jobs in high-growth areas between now and July of next year.

The latest cuts were made across the board and did not focus in "one particular place and not others," said spokesman Lou Gellos. Departments affected appeared to include the IT department at Microsoft, also known as MSIT; the sales, marketing and service group, also known as SMSG; and MSN.com, the online content sites Microsoft runs, according to sources at the company.