Report: Microsoft to ax 800 more jobs (but top five execs earn $31 million)

Microsoft makes the biggest layoff in its history, bigger.

Microsoft (NASDAQ: MSFT) said on Wednesday that it will cut 800 more jobs, bringing total cuts to 5,800 including the layoffs it announced in January. The company was not specific as to what kinds of jobs would be eliminated nor in what locations. Meanwhile, the company's top five executives will earn total pay of $31 million for 2009, according to documents filed in September with the SEC.

In May, Microsoft CEO Steve Ballmer said that job cuts wouldn't be complete until June 2010. At that time, he reiterated a target of 5,000 heads to roll.

The cuts are a pittance compared to Microsoft's worldwide headcount, which numbers about 90,000. But headcount is down 4% from the same period last year and that is the largest annual decline in the company's 34-year history, according to CNN.

In the company's last quarterly results, released on October 23 (timed to be the day after Windows 7 launched), Microsoft reported some severe drops in year-over-year revenue. It beat analysts expectations for the quarter and still turned in a tidy profit of $3.57 billion in net income (or 40 cents a share). But executives also made it clear that they were watching the bottom line by managing expenses. Executives had in January and again in April said the target would be $1 billion of expenses trimmed. It exceeded that by about another $400 million, according to a story in Bloomberg.

"Microsoft, which stopped giving earnings forecasts in January, didn’t provide a specific outlook for profit and sales. The company said it will spend as much as $26.5 billion on operating costs in the year ending June 30, down from a previous forecast for as much as $26.9 billion. Chief Financial Officer Chris Liddell told analysts on a conference call that Microsoft probably won’t boost operating spending in the year after that either."

I'll admit that Microsoft is not the most egregious public company when it comes to executive pay (CEO Steve Ballmer gets by on a base salary of a mere $665,833). But it is interesting to note that while orchestrating the company's largest layoff in history and it's worst declines in revenue, the top five executives still managed to pay themselves about $31 million dollars. Steven Elop even scored for himself a $2 million signing bonus and a whopping $4.1 million bucks worth of relocation expenses that included Microsoft buying his house because he was unable to sell it.

Here are the specifics, taken from Microsoft's September 29, 2009, SEC filing.

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