Microsoft Corporation is on lay off spree handling pink slips to 3000 people in May despite eliminating 1400 jobs in January this year.
In January, Microsoft had disclosed plans to eliminate 5,000 positions, more than 5% of its global work force consisting 96,000 full-time workers it employed at the time and was also buoyed by the fact that its net income fell 11 per cent for the quarter ended December 31, 2008.
Most of the job cuts were in U.S but it recently struck Indian soil when it decided to lay off 55 employees working in Indian operations.
This severe action is being taken to cut costs in various business divisions to counter the turbulence faced by declining IT budgets at Top companies and even by SME’s .
The scenario is worse even though global economy is on recovering path as it showed first ever drop in revenues to decline 6% in March quarter.
The pressure on topline is due to the slackening vista sales as buyers ripple under the fear of Windows 7 launch coming as an alternative. Its Business division is also showing stagnant growth as new customers prefer Online and Open source office alternatives to combat recession.
The losses incurred in Console and Online divisions is also adding salt to its wounds and even its mobile division faces competition by the heated entry of android.
Although Microsoft is open to more job cuts in future it is still banking on its windows 7 and office 2010 release to take future action. It is also perceiving that windows 7 would provide a viable alternative to Windows XP users and may finally indulge buyers to move from Windows XP.
Windows 7 is a part of prolong combating strategy to fight slower growth as it derives majority of revenues through Windows and office sales.
It may also not go for more job cuts in Indian operations as it is banking on emerging markets to provide respite to already saturated western counterparts.
