Microsoft Corp. said Thursday it is cutting 5,000 jobs over the next 18 months -- more than 5 percent of its work force -- a sign of how badly even the biggest and richest companies are being stung by the recession.
The layoffs appear to be a first for Microsoft, which was founded in 1975, aside from relatively limited staff cuts the software company made after acquiring companies.
The company announced the cuts as it reported an 11 percent drop in second-quarter profit, which fell short of Wall Street's expectations. Microsoft shares plunged 8 percent in morning trading.
The biggest names in the technology sector have been no stranger to layoffs lately. Giants such as chip maker Intel Corp. and even Google Inc. are among the companies that have pulled back on jobs to hunker down in the recession.
Even with $20.7 billion in cash on hand, Microsoft said its business prospects were hurt by the deteriorating global economy and lower revenue from software for PCs. The holiday quarter of 2008 was the worst the PC market had seen since 2002, with computer shipments declining about a half of 1 percent, according to IDC, a technology research group.
Making matters worse, the one type of PC consumers have warmed to in tight times -- the low-cost, low-power "netbook" -- actually cut further into Microsoft's earnings. The tiny portable computers run on Windows XP, which is older and less profitable for Microsoft than Windows Vista.
In a memo to employees, Chief Executive Steve Ballmer acknowledged that Microsoft is "not immune to the effects of the economy. Consumers and businesses have reined in spending, which is affecting PC shipments and IT (information technology) expenditures."
Ballmer said Microsoft cut operating expenses by $600 million in the quarter, but that it wasn't enough.
The layoffs, starting with 1,400 on Thursday, will affect workers in research and development, marketing, sales, finance, legal and corporate affairs, human resources and information technology, and mostly in Redmond, Wash., where the company is based. Ballmer also said changes would occur in departments that handle support, consulting, operations, billing, manufacturing, and data center operations, but he did not say whether layoffs are planned in those cases.
Microsoft won't stop hiring entirely. Ballmer said the company will add new jobs to support "key investment areas" over the next 18 months, so the total number of employees will drop by 2,000 to 3,000. Microsoft employs 94,000 people overall.
"I would have expected a more aggressive cut," said Cowen and Co. analyst Walter Pritchard. "They're trying to have their cake and eat it too, in terms of not cutting and hoping to have everything they were going to have before."
The software maker is trimming costs for travel, contractors and vendors, and said it will scale back a massive expansion to its Redmond campus.
Microsoft said its job cuts will reduce operating costs by $1.5 billion as it prepares for lower revenue and earnings in the second half of the year. The company says it is unable to offer profit and revenue guidance for the rest of the year, because of the market volatility.
Microsoft said profit in the last quarter fell to $4.17 billion, or 47 cents per share, from year-ago earnings of $4.71 billion, or 50 cents per share.
Total revenue edged up 2 percent to $16.63 billion.
The results missed Wall Street's forecast for earnings of 49 cents per share on sales of $17.08 billion.
Microsoft makes most of its profits on sales of the Windows operating system and its Office package of software, which includes programs such as Word, PowerPoint and Excel. Revenue and earnings shrank in both of those divisions.
A bright spot for Microsoft is software for corporate server computers, where revenue is still rising. Gartner analyst Neil MacDonald noted that the server business can thrive in a downturn because back-office software can help companies improve efficiency and save money.
Agencies
Showing posts with label 000 jobs. Show all posts
Showing posts with label 000 jobs. Show all posts
Thursday, January 22, 2009
Friday, December 12, 2008
Alcatel-Lucent to cut 1,000 jobs; To reduce 5,000 contractors
Telecom major Alcatel-Lucent will cut 1,000 managerial posts and remove 5,000 contractors as part of its costs-saving initiatives.
"The company expects to reduce the number of managers by approximately 1,000 and the number of contractors by approximately 5,000," it said in a statement today.
"It will also complete its existing restructuring initiatives as well as seek savings in real estate, support functions and discretionary spending".
The firm would initiate a set of strong actions designed to reduce its break-even point by one billion euro per year in both 2009 and 2010, according to the statement.
Further, Alcatel-Lucent would be consolidating its global R&D centres. "Other actions will be taken to have a more agile R&D, such as further simplifying the Carrier Product Group from 6 to 4 divisions," the statement added.
As part of its strategic transformation, the telecom major would be focusing on service providers and enterprises markets, among others.
"We want to stimulate a sustainable business model for the industry that will fuel innovation and the capital investment required to expand the overall web experience to more people and businesses," Alcatel-Lucent CEO Ben Verwaayen said.
For the full year 2009, the firm anticipates the market for telecommunications equipment and related deployment services to be down between 8 to 12 per cent at constant exchange rate.
Source: Agencies
"The company expects to reduce the number of managers by approximately 1,000 and the number of contractors by approximately 5,000," it said in a statement today.
"It will also complete its existing restructuring initiatives as well as seek savings in real estate, support functions and discretionary spending".
The firm would initiate a set of strong actions designed to reduce its break-even point by one billion euro per year in both 2009 and 2010, according to the statement.
Further, Alcatel-Lucent would be consolidating its global R&D centres. "Other actions will be taken to have a more agile R&D, such as further simplifying the Carrier Product Group from 6 to 4 divisions," the statement added.
As part of its strategic transformation, the telecom major would be focusing on service providers and enterprises markets, among others.
"We want to stimulate a sustainable business model for the industry that will fuel innovation and the capital investment required to expand the overall web experience to more people and businesses," Alcatel-Lucent CEO Ben Verwaayen said.
For the full year 2009, the firm anticipates the market for telecommunications equipment and related deployment services to be down between 8 to 12 per cent at constant exchange rate.
Source: Agencies
Wednesday, December 10, 2008
Sony to slash 16,000 jobs globally
Sony Corp plans to eliminate 16,000 jobs in the largest reduction announced by a Japanese company since the credit crunch drove the world into a recession.
Sony will curb investments, outsource production and move away from unprofitable businesses by March 2010, as part of plans to save more than 100 billion yen ($1.1 billion) a year, the Tokyo-based company said. The job eliminations will take place in the electronics division and include 8,000 contract workers, it said.
The reductions highlight the severity of the slump in consumer spending at a time when companies typically focus on the peak Christmas shopping season.
Sony, the world’s second largest maker of consumer electronics, said a much larger than anticipated deterioration in the economy spurred the cuts and the company may revise its midterm targets.
“I can’t see how the company will regain its charm with consumers,” said Hiroshi Sato, chief investment officer of Tokyo-based GCSAM Co, who sold his Sony Holdings. The company might suffer from a bigger earnings decline in the second half, or even losses, if it doesnt take any measures. The company said it will announce the financial impact
of the measures in January, when reporting fiscal thirdquarter results.
The reason for this move is the deterioration of the economy, which was much larger than we expected, senior vice president Naofumi Hara said.
Sony on Oct 23 said net income will probably drop 59% in the year ending March 31, reducing the outlook by 38% as the stronger yen and slumping demand undermine sales of its electronics including Bravia televisions.
The electronics maker will review the impact of the reorganization steps and revise its current-year and mid-term profit targets if needed, Hara said, without elaborating. The company faces no problem with cash flow, he said.
Source: Agencies
Sony will curb investments, outsource production and move away from unprofitable businesses by March 2010, as part of plans to save more than 100 billion yen ($1.1 billion) a year, the Tokyo-based company said. The job eliminations will take place in the electronics division and include 8,000 contract workers, it said.
The reductions highlight the severity of the slump in consumer spending at a time when companies typically focus on the peak Christmas shopping season.
Sony, the world’s second largest maker of consumer electronics, said a much larger than anticipated deterioration in the economy spurred the cuts and the company may revise its midterm targets.
“I can’t see how the company will regain its charm with consumers,” said Hiroshi Sato, chief investment officer of Tokyo-based GCSAM Co, who sold his Sony Holdings. The company might suffer from a bigger earnings decline in the second half, or even losses, if it doesnt take any measures. The company said it will announce the financial impact
of the measures in January, when reporting fiscal thirdquarter results.
The reason for this move is the deterioration of the economy, which was much larger than we expected, senior vice president Naofumi Hara said.
Sony on Oct 23 said net income will probably drop 59% in the year ending March 31, reducing the outlook by 38% as the stronger yen and slumping demand undermine sales of its electronics including Bravia televisions.
The electronics maker will review the impact of the reorganization steps and revise its current-year and mid-term profit targets if needed, Hara said, without elaborating. The company faces no problem with cash flow, he said.
Source: Agencies
Tuesday, December 9, 2008
Have 30,000 lost jobs over the past one week?
News of the US officially slipping into recession seems to have spurred another round of massive retrenchment, as the first week of December alone saw a stunning 30,000 layoffs, with more than half happening in the world’s largest economy.
The whopping numbers are just a continuation of a strained labour market as employers in America slashed 5,33,000 jobs in the month of November, the maximum downsizing in 34 years. Right from telecom giant AT&T to battered banking major Credit Suisse to steel maker ArcelorMittal, the layoffs are spread across the sectors, amid the worst financial turmoil since the great depression of 1930s.
Moreover, since the start of recession in December last year, as concluded by the National Bureau of Economic Research, 1.9 million people lost their jobs and two-thirds of the losses happened in the last three months. Leaving a gloomy November, this month’s layoffs are led by AT&T which would slash 12,000 jobs or about four per cent of its total workforce.
JP Morgan is reportedly planning to reduce its workforce by 21%. The move is expected to result in 4,000 employees being given the pink slip by January at Washington Mutual.
Source: Agencies
The whopping numbers are just a continuation of a strained labour market as employers in America slashed 5,33,000 jobs in the month of November, the maximum downsizing in 34 years. Right from telecom giant AT&T to battered banking major Credit Suisse to steel maker ArcelorMittal, the layoffs are spread across the sectors, amid the worst financial turmoil since the great depression of 1930s.
Moreover, since the start of recession in December last year, as concluded by the National Bureau of Economic Research, 1.9 million people lost their jobs and two-thirds of the losses happened in the last three months. Leaving a gloomy November, this month’s layoffs are led by AT&T which would slash 12,000 jobs or about four per cent of its total workforce.
JP Morgan is reportedly planning to reduce its workforce by 21%. The move is expected to result in 4,000 employees being given the pink slip by January at Washington Mutual.
Source: Agencies
Friday, December 5, 2008
AT&T likely to cut 12,000 jobs
AT&T, the largest US phone company, will cut 12,000 jobs, striving to trim expenses as the US economy falters. The reductions amount to about 4% of the workforce, Dallas-based AT&T said on Thursday in a statement.
The company plans to record $600 million in expenses for severance this quarter. The reductions would bring AT&T’s total job cuts to more than 25,000 this year. The carrier and its smaller competitors are grappling with slowing consumer spending and a jobless rate at its highest level in 14 years.
AT&T fell 18 cents to $28.90 in early trading after closing at $29.08 on Wednesday on the New York Stock Exchange. The carrier also plans to reduce spending next year to cope with the slowdown, with plans to give specific forecasts for 2009 spending plans in late January.
The carrier said its still adding jobs in its wireless and video units. In July, the company said it would eliminate 10,000 jobs to reduce overlap in some departments after its 2006 purchase of BellSouth Corp. Before that, the company announced 4,650 cuts, some in its home-phone business, which has lost customers to cable operators and wireless competitors.
Source: Agencies
The company plans to record $600 million in expenses for severance this quarter. The reductions would bring AT&T’s total job cuts to more than 25,000 this year. The carrier and its smaller competitors are grappling with slowing consumer spending and a jobless rate at its highest level in 14 years.
AT&T fell 18 cents to $28.90 in early trading after closing at $29.08 on Wednesday on the New York Stock Exchange. The carrier also plans to reduce spending next year to cope with the slowdown, with plans to give specific forecasts for 2009 spending plans in late January.
The carrier said its still adding jobs in its wireless and video units. In July, the company said it would eliminate 10,000 jobs to reduce overlap in some departments after its 2006 purchase of BellSouth Corp. Before that, the company announced 4,650 cuts, some in its home-phone business, which has lost customers to cable operators and wireless competitors.
Source: Agencies
Monday, November 17, 2008
Tech sector may lose 180,000 jobs
The technology sector is on pace to lose 180,000 jobs this year, the most since 2003, amid a global economic downturn, according to a report.
Challenger, Gray & Christmas, Inc, a Chicago-based global consulting firm which tracks job-cut announcements, said telecommunications, electronics and computer industry companies had cut 140,422 jobs through October 31.
It said 69,654 tech-sector jobs had been cut in the third quarter of the year alone. That did not include major layoffs announced since October 31 such as the 5,000 to 6,000 job cuts at Sun Microsystems.
"At the current pace, the year-end total could reach 180,000, which would be the largest annual total since 2003, when technology firms announced 228,325 job cuts," it said.
A total of 107,295 tech-sector jobs were cut in 2007.
Challenger, Gray & Christmas, Inc, a Chicago-based global consulting firm which tracks job-cut announcements, said telecommunications, electronics and computer industry companies had cut 140,422 jobs through October 31.
It said 69,654 tech-sector jobs had been cut in the third quarter of the year alone. That did not include major layoffs announced since October 31 such as the 5,000 to 6,000 job cuts at Sun Microsystems.
"At the current pace, the year-end total could reach 180,000, which would be the largest annual total since 2003, when technology firms announced 228,325 job cuts," it said.
A total of 107,295 tech-sector jobs were cut in 2007.
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