Microsoft Thinking Over Thousands Of Redundancies
It is disheartening to know that since the software giant Microsoft is considering a plan for substantial redundancies to combat the economic downturn, the company’s 3,000 employees in the UK face an uncertain 2009.
It has been learnt that at least 10 per cent and possibly as much as 17 per cent of its global workforce could be cut in what would be the first mass lay-offs in the company's 32-year history. Worldwide, nearly 15,000 jobs could be under threat.
If adhered to the rumors which are floating around in the US, overseas divisions could be particularly hard hit and an announcement of the plan could come within two weeks. Yesterday, the company denied commenting on the speculation.
According to the analysts, pressure would be faced by Microsoft on several fronts this year. Consumer sales of its Windows operating system – installed on nine out of ten personal computers – could slow with retail spending having turned down. Moreover, businesses are scaling back, threatening license fees from its Office products, including Microsoft Word and other corporate software. Online advertising growth has also slowed down sharply as a result of the recession, threatening Microsoft's hopes of making a profit at its troubled MSN internet business.
Brad Reback, analyst at Oppenheimer & Co informed the clients, “The prevailing wisdom on Microsoft is that the company may pre-announce disappointing December results. Should such headcount reductions materialize, we would view them as a positive sign that management is interested in preserving the company's operating margin structure through the downturn.”
Analysts also predict, “A 10 per cent cut in Microsoft's 90,000 global workforce could save $1.2bn (£826m) a year.”