Microsoft following Sony’s path from News

Recently, Sony responded to the economic downturn with a large scale layoff as a cost cutting measure. This past Monday, a leaked PowerPoint document gave signs of potential cost cutting measures that could be employed by Microsoft after releasing their second quarter earnings statements. Today, Microsoft announced these plans formally and for the first time in the company’s 34 year history will be cutting what they consider to be a substantial part of their workforce. Effective immediately, 1,500 jobs will be cut, with 3,500 more over the next 16 months. This, in addition to a pay freeze, will save Microsoft an estimated 2.2 billion dollars in 2009. Additional savings of up to $82 million are expected by halting construction on the certain buildings on the Redmond campus.

These layoffs are most likely due to dramatic losses in income, not to mention a near half million loss the Online Services division racked up attempting to compete with search behemoths Google and Yahoo. Despite income levels coming in at 11% below a year earlier this quarter, Microsoft’s overall revenue continues to grow, up 2% from last year’s whopping $16.37 billion.

Sources: Seattle PI | CNN

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