Microsoft on Tuesday began notifying workers who won’t make it through the second wave of layoffs. CEO Steve Ballmer announced the job cuts in a staff e-mail as part of the 5,000 job reductions announced in January.
The layoffs mark the first notable employment hiccup at Microsoft in its 34-year history and come in response to an economic downturn that has impacted the software giant’s operations.
“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,” Ballmer said in his e-mail to employees.
Rehiring Terminated Employees
A Microsoft spokesperson told Dow Jones that the company is eliminating positions across several areas, but didn’t indicate which areas or how many jobs. Microsoft plans to cut about five percent of its 96,000 employees by June 2010 to save $1.5 billion a year.
Microsoft cut 1,400 jobs in January. Ballmer noted in his e-mail that Microsoft will be nearly done with layoffs after this round. That would indicate that thousands are about to receive pink slips. Microsoft said the second wave of layoffs will be spread across U.S. and international markets. The first wave was mostly concentrated in the U.S.
Microsoft is providing laid-off employees with severance packages of an undisclosed amount. In a bright spot, Microsoft said some of the terminated workers may be rehired as part of the 2,000 to 3,000 new jobs the company expects to create between now and June 2010.
‘A Minor Adjustment’
Microsoft isn’t alone in its layoffs. Tech companies have witnessed employment bloodbaths in the past two quarters. The outlook remains cloudy about a full economic recovery that would allow IT firms to begin delivering measurable, predictable sales and revenues.
“Much of what happens with Microsoft and other IT firms…