Microsoft closes in on 5,000 job cuts

Microsoft initiates a second wave of job cuts Tuesday and hints that more layoffs could be on the way.

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By David Goldman, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Microsoft said Tuesday that it is moving forward with a second wave of mass layoffs, getting the company closer to its target of 5,000 job cuts by mid 2010, according to an e-mail Chief Executive Steve Ballmer sent employees.

The company would not say exactly how many workers were being affected in this latest round.

In January, Microsoft announced its first large-scale layoffs in the company's 34-year history, cutting 1,400 positions immediately out of a potential 5,000. The cuts, which are expected to be completed by June 2010, are aimed at saving the company some $1.5 billion in operating expenses and $700 million in capital expenditure.

"As part of the plan we announced in January to reduce costs and increase efficiencies, today we are eliminating additional positions across several areas of the company," a company spokesman said. "While job eliminations are always difficult, we are taking these necessary actions in response to the global economic downturn."

In Tuesday's e-mail, Ballmer said the company is "mostly but not all done with the planned 5,000 job eliminations." He said additional jobs could be cut going forward as Microsoft monitors the impact of the recession on the company.

A Microsoft source said there are no plans to get rid of more than 5,000 jobs, and any allusions Ballmer made Tuesday to further cuts were to those that had been previously announced.

The economic downturn has taken a toll on Microsoft, as weakness in the global PC market has severely disrupted sales of its software and Windows operating system. Late last month, Microsoft reported quarterly sales that fell for the first time in its 23-year history as a public company, and profit that fell 32% from a year earlier.

Shares of Microsoft (MSFT, Fortune 500) slid 2% in afternoon trading. To top of page

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