After reporting on Apple’s surprise suceess over the last quarter, Microsoft has released news more in keeping with the current financial turmoil.
Over the next 18 months Microsoft have confirmed that they will cut 5000 jobs, starting off by an immediate loss of 1400 jobs. This marks Microsoft’s first mass layoffs in its 34 year history.
The company reported a net profit of £3bn for the three months to 31 December, down 11% on last year and also less than analysts’ expectations. This profit did not even reach half of Apple’s £7.4 billion in revenue over the same quarter.
In response to the poor performance of the company, Microsoft chief executive Steve Ballmer said, “While we’re not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach.”
Microsoft said that its job cuts will affect its technology, research and development, marketing, sales, finance, legal and human resources areas.
Source: BBC News
4 thoughts on “Microsoft to Axe 5000 Jobs as Apple Blossoms”
This is bad news. I wonder how many other tech companies will be affected by the recession. So far its mainly retailers but it seems that it is slowly spreading.
It’s interesting though that Apple are increasing sales while Microsoft are going in the other direction. It perhaps shows that it’s not necessarily the industry in trouble as they both do basically the same thing.
yeah thats a good point, I never thought about that.
I think Microsoft and Apple are very different though, Microsoft are a software company and Apple does well at Hardware like MACs, Phones and MP3 players.
Microsoft have recently made a number of failed products in its attempts to penetrate new markets e.g. the Zune was a huge flop. Microsoft have also failed at its core specialism with the Vista OS. So this maybe why they are having to go trim.
I think the biggest threat to Microsoft is not Apple but Google. Microsoft is having to change the way it thinks, currently Google are seen as an ethical company who aren’t greedy and are quite generous in their approach however Microsoft in the past have tried to Monopolise where possible and take as much money from us as they could (e.g. they checked if you had a legitimate OS when downloading IE7 as an example). It does seem that they are changing by releasing my open source software and embracing their community. Also Windows 7 looks like it will make up for their failure in the OS arena.
I know I’ve kind of gone off topic but I thought it was important to consider this in any Apple Vs Microsoft debate.
That’s very true that Google is really Microsoft’s biggest competitor. Apple made their profit by consumer electronics which isn’t Microsoft’s main arena.
It’s interesting to note that over the same quarter at the end of last year Google’s revenue was up by 18% compared to the same time in 2007, which potentially came at a cost to Microsoft as people seem to be opting more for open source options as the effects of recession grows.
I understand though that a lot of Google’s revenue comes from GoogleAds which is really a league unto its own!