Microsoft Announces 3,000 New Layoffs

May 6, 2009 at 12:18am ET by Vanessa Fox

Today, Microsoft announced that it had delivered layoff notices to 3,000 employees across several divisions (1,200 in Washington state). This comes just months after an initial round of 1,400 who were let go when Microsft announced second quarter earnings. At that time, Microsoft said it planned to eliminate 5,000 jobs this year, and Microsoft’s CEO Steve Ballmer said that today’s news was phase two of that plan (with the remainder planned for sometime before June 2010 and “as quickly as possible”).

However, Steve Ballmer didn’t rule out additional layoffs. In an internal memo, he said:

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.

No word on what departments were hit, although an anonymous comment to the Mini-Microsoft blog claimed that no layoffs happened in Live Search and in fact, they have been given extra headcount while Windows was heavily affected. Another anonymous commenter claimed that entire groups in MSN were eliminated. Others reported that several groups within Microsoft Advertising were impacted.

If MSN was indeed hit, that move seems a bit shortsighted as a large portion of Microsoft’s search traffic still seems to come through MSN rather than Live Search. Seems that Microsoft should focus on making an attractive property even more attractive if since it accounts for so much of its valuable search traffic.

So far, little concrete has been announced about how these cuts impact Microsoft’s product plans, but you can follow the disccussion on Techmeme.

Vanessa Fox is a Contributing Editor at Search Engine Land. Called a “cyberspace visionary” by Seattle Business Monthly, she is an expert in understanding customer acquisition from organic search. She shares her perspective on how this impacts marketing and user experience at ninebyblue.com and provides authoritative search-friendly design patterns for developers at janeandrobot.com.

See more articles by Vanessa Fox >

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giggles, May 14th, 2009 at 11:12 pm ET:

Vanessa,

Just ran across your post about the layoffs last week. Unfortunately the Live Search team did take a hit, at least in Colorado, where the Virtual Earth imagery production shop got decimated. In a building with about 80 people in it, the home office saw fit to boot 15 fte’s and 11 contractors including a good chunk of the production crew (including myself) that actually processed all the imagery and 3d stuff for the new cities that get uploaded to the VE site. I have no idea how it will go forward but it will be slowly!

It seems pretty obvious that someone in Redmond didn’t want to deal with layoffs in their own backyard so they pushed them on us but that’s just a hunch.

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