Gloom, uncertainty at Microsoft as layoff announcement sinks in |
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REDMOND -- The morning was appropriately foggy and dark as Microsoft employees came to work today, bracing for details of the unprecedented cutbacks announced by the company before dawn.
The immediate question was how the cuts would affect them, and their product groups. But because the 5,000 layoffs will be staggered over 18 months -- with 1,400 of them coming immediately -- this morning's announcement doesn't end the uncertainty that surrounded the Redmond campus for the past few weeks as layoff rumors circulated.
"There's going to be a lot of anxiety because 1,400 is just the first wave," said one employee from the Server & Tools Division, who asked not to be identified. "The next year and a half, people are going to be on tenterhooks."
Employees arriving at the Overlake Transit Center were greeted by television trucks and photographers dispatched to the scene to cover the story. Although layoffs had been widely rumored, some employees were surprised that the announcement came when it did. Some walked with their heads down, avoiding the cameras, as they went from regional buses to shuttles that took them to their buildings.
"I’m only hearing it from you right now," one employee said when asked for his take on the news.
Waiting for them on their computers and smart phones was an email message from Microsoft Chief Executive Steve Ballmer, explaining the company's rationale for making the cutbacks.
"The decision to eliminate jobs is a very difficult one," Ballmer wrote. "Our people are the foundation of everything we have achieved and we place the highest value on the commitment and hard work that you have dedicated to building this company. But we believe these job eliminations are crucial to our ability to adjust the company’s cost structure so that we have the resources to drive future profitable growth."
The company isn't saying how many of the job cuts will be in the U.S. or the Seattle region. But the U.S. employees whose jobs are among the initial 1,400 cuts are expected to be notified today.
Microsoft regularly conducts employee evaluations to gauge individual performance, but the company declined to say how it will choose whom to lay off, or which product groups will be affected most. Some cuts will be made with an eye toward boosting "efficiencies," while others will reflect the company's "investment priorities," a spokeswoman said.
The company will still be hiring in some areas, such as its Internet search initiative, Ballmer told analysts during a conference call this morning. As a result, the net job loss over the 18 months will be lower, in the range of 2,000 to 3,000 people. Microsoft is separately planning reductions in its contract work force.
Ballmer told employees in his email that some whose jobs were cut should be able to find other positions internally. Unspecified severance and benefits will be paid to those who don't, he wrote.
One employee who arrived at the Transit Center in full bicycling gear was anxious to find out the details. Based on the announcement alone, he explained, it wasn't clear how his group would be affected.
"Before I change out of my bike clothes," he said, "I’m going to check my email.
Todd Bishop contributed to this report.
Todd Bishop is co-founder and managing editor of TechFlash. He has covered Microsoft and the technology industry for more than five years, most recently as a daily newspaper reporter and blogger based in Seattle.
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