Microsoft officials have confirmed that the company is making another round of job cuts today, according to reports from TechFlash and PaidContent. Rumors of the cuts have been widely circulated. The software giant is eliminating 800 jobs around the world, TechFlash reports, citing Microsoft spokesman Lou Gellos as saying that the cumulative number of layoffs go beyond the planned 5,000 cuts announced in January. About a quarter of the job cuts are reportedly in Washington, where Microsoft’s headquarters are. While early reports on adoption of the company’s new Windows 7 operating system are positive, the latest round of cuts may still have to do with the mobile tech-related reasons for staff reductions that the company cited in January. UPDATE: Microsoft employees are now confirming online that they’ve been let go–more below the fold.
In January, Microsoft announced plans to cut 5,000 jobs following a $465 million shortfall in OEM revenue. According to the company’s 10-Q filing from then:
The decline in OEM revenue reflects an 11 percentage point decrease in the OEM premium mix to 64 percent, primarily driven by growth of licenses related to sales of netbook PCs, as well as changes in the geographic and product mixes.
The fact that profit margins are razor thin in the red-hot netbook category has plagued Microsoft all year, and the company’s Windows Mobile strategy is showing signs of profound weakness. While our calls for confirmation of the latest round of job cuts have yet to be returned, it’s entirely likely that the shrinking level of opportunity that Microsoft has in the mobile arena continues to be the explanation for staff reductions. We will update this report as more details become available.
UPDATE: Don Dodge, from Microsoft’s Emerging Business Team, has confirmed on his blog that he was among the employees let go today. “This was a total surprise to me, and management offered no explanation,” he reports.