Ballmer: Microsoft to spend more than $9 billion on R&D this year |
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Ballmer: Microsoft to spend more than $9 billion on R&D this year
Despite Microsoft's recent cutbacks, the company still expects to spend more than $9 billion a year on research and development, CEO Steve Ballmer told Democratic leaders today at an event in Williamsburg, Va.
That's roughly in line with the spending Ballmer was predicting last fall. According to the Microsoft transcript of today's speech, Ballmer said the company has drawn inspiration from the way RCA weathered the Great Depression. Here's an extended excerpt from his speech.
We went back and studied what innovation companies did during the time of the Great Depression. One company that stands out, if you study the Depression, is RCA.
Now, the fact that RCA is not around today, this has nothing to do with their behavior during the Depression. There's probably good learnings for a lot of technology companies in that.
But during the time of the Depression, RCA was probably the most broad-based R&D-centric company in America. And while it cut costs certainly to survive the Depression, it never retreated from its commitment to core research and development. And as a result, after the Depression had ended, it really led and the U.S. led TV technology developments for the next 25 years.
That was good for RCA; it was good for America.
In my view, American companies aren't going to be able to weather this economic downturn just by cutting costs either. You may have heard that Microsoft, our company has decided that we need to reduce 5,000 positions. What you may not know is that at the same time we've decided we'll also create two to three thousand new jobs -- mostly in the US -- as we continue to push into new areas that require investment.
In addition, despite the tough economy -- I might even say because of the tough economy -- our company will continue to invest more than US$9 billion a year in R&D, because we think it's that R&D spending that will cause us to remain strong.
According to the transcript, the comment drew applause from the politicians in attendance, as a sign of the company's continued belief in technology. However, it might not set well with Wall Street. Some analysts recently said the company didn't go far enough to cut spending with its recent layoffs and other cutbacks.
Ballmer also addressed the broader economy, calling the current stimulus package "vital." He explained, "It will provide a cushion as we reach the reset point and it will help restart our economic engine."
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