US-based Microsoft Corporation said on May 5 that the large-scale lay-off plan it had announced earlier this year has now entered its second stage.
Microsoft announced its intention to cut 5,000 jobs at the beginning of this year, accounting for over 5 percent of its entire workforce. It is the largest downsizing plan the company has adopted since it was established in 1975. Of the total layoffs, 1,400 jobs have been immediately axed, while the remaining posts will be gradually cut over the next 18 months.
Microsoft's Chief Executive Officer Steve Ballmer wrote in an e-mail sent to the employees on May 5 that Microsoft's 5,000-people downsizing plan will be essentially concluded following the completion of the second-stage. This means the number of people laid off in the second stage will be around 3,600.
Microsoft has stated that this round of layoff involves employees in the US and other countries, and all employees laid off will receive a severance package. Moreover, from now until the middle of 2010, Microsoft will create 2,000 to 3,000 new jobs, after which, some of those previously laid off may be re-employed.
Due to the drop in IT spending around the globe following the financial crisis, and sustained sluggishness in the PC business and server markets in particular, Microsoft's business revenue in the first three months of this year dropped year-on-year for the first time since it went public 23 years ago.
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