The piece of news that started it all

About 2 weeks ago undisclosed source close to Microsoft inc. shared information with the IT community. He stated that the company is going to cut jobs in certain sectors again, following last year cut-offs, which were the biggest in the sector – up to 5000 jobs were laid off then.

Many people around the world, held their breath, but still, as the source was just “close to the company” and not internal one, they hoped the whole thing is just a hoax to lower Microsoft shares a little – just a part of the big game of the stock market. Things like this happen from time to time, as negative information on a company has immediate impact on the share price. But in this case this has happened in the past, an it was very probable the information was true.

On the 7-th of July, the company began a process which made the news sound much more like true than rumor  – “Microsoft is delivering layoff notices in selected groups as part of the strategic realignment that the company traditionally makes at the beginning of its fiscal year” the leaked news stated. What it means is that many people around the world are going to loose their jobs in very near future.  As you see, the exact number of job cuts is not stated, but it is expected to be near one thousand worldwide and above a hundred in the Seattle area alone.  Combined with the last year lay off, it gives more than 6000 employees of Microsoft are now out, looking for a new job.

What it means?

Reading about such big numbers, you may thing that Microsoft has some serious problems, but it seems this is not the case. Employed by it are more than 88000 people around the world, and as new cuts are in sectors like marketing and advertisement, the technical knowledge base will most likely not be affected by any way by the optimization process. Also bear in mind that this number stayed pretty constant even with the job cuts done last year – meaning that Microsoft has hired at least the same number of people in different niches (mainly in telecom department), trying to restructure, while the crisis dimensions become clear. And with the financial resources available, it is expected no problems whatsoever will emerge from new job cuts as well.

It is also expected that many employees fired on this round, will be invited to join Microsoft again on different positions, which also suggests another optimization process rather than some financial difficulties for Microsoft.

As of 10-th of July, the company hadn’t filed a WARN notice with the Washington State Employment Security Department, which also suggest not so big lay offs are expected as these done about the same time last year.

So, if you have Microsoft shares do not rush to sell them, the company is in good state, and no problems are expected even with these job cuts.