Feeds

Microsoft sharpens axe as PC sales drop?

Cheer-free holiday quarter

Providing a secure and efficient Helpdesk

Fresh reports of Microsoft's first-ever job cuts are again circulating, with the Wall St Journal writing that the company is reviewing its options.

The Journal has reported that the cuts could come next week but that Microsoft is considering cutting fewer than the 15,000 staff rumored in recent weeks - a figure that would total 16 per cent of its workforce. It also said Microsoft could end up finding alternative positions for staff, avoiding the need to make layoffs.

If true, the cuts would come in the week Microsoft announces its second-quarter results - due on January 22. A Microsoft spokesperson said the company would not comment on "rumors and speculation".

Rumors of January layoffs surfaced last month, and are going around the "financial grapevine" - meaning Wall Street analysts.

Any cuts would follow what's shaping up to have been a worse-than-expected holiday shopping season - a season during which Microsoft traditionally profits handsomely as consumers buy PCs and gadgets running Windows.

US retail sales - excluding cars - fell twice as much as had been expected during December - down 3.1 per cent, Bloomberg said. And, rather than growing, sales of PCs during the whole of the fourth quarter fell by 0.4 per cent year-over-year and 2.5 per cent sequentially to 77.3 million units, according to number-crunching analyst IDC.

Sales of portable PCs increased 20 per cent, but that was down 50 per cent on the year, while sales of desktop machines slumped 16 per cent.

Microsoft will have banked on the fourth-quarter to not just sell PCs but also Windows mobile devices and Zunes. Last year, Microsoft's second fiscal quarter - which spans the holiday shopping season - reported $16bn in revenue, $2bn more than its previous record.

Despite its efforts to go online, the PC and server business remains Microsoft's bread and butter. Should Microsoft make cuts, or move staff around, changes will likely be felt in the loss-making online units and - possibly - entertainment and devices.

Microsoft's drive online has helped contribute to today's massive head count: numbers have grown 28 per cent to 91,000 in just two years and 49 per cent since 2005, with accompanying increases across R&D, sales, marketing, and support.

Company chief executive Steve Ballmer last week re-committed Microsoft to continued spending on R&D while speaking at the Consumer Electronics Show (CES). Last year Microsoft spent $8bn on R&D, an amount that's grown steadily since 2005 as it invests online. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple's iPhone 6 first-day sales are MEANINGLESS, mutters analyst
Big weekend queues only represent fruity firm's supply
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Bill Gates, drugs and the internet: Top 10 Larry Ellison quotes
'I certainly never expected to become rich ... this is surreal'
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.