Were Microsoft Layoffs Political or A Token Gesture?

With absolutely no disrespect to the 1,400 employees Microsoft announced they would lay off (my heart goes out to you), you have to wonder if the economy is impacting Microsoft like most companies. I say this knowing that I also called for Microsoft to do NO layoffs and stay busy on task getting important product work done. I've heard many speculate that 5,000 layoffs would really just cut back on the hiring and the normal in-out attrition of Microsoft employment activity during each year. Chatter at the water cooler is that Microsoft did their layoffs more as a political gesture than out of need. I hate to think those 1,400 folks who received pink slips were the casualty of Microsoft playing some kind of weird politics, but it makes sense in a conspiracy theory kind of way. Of course all this would be very difficult to confirm. We'll just have to see if and how Microsoft follows through on their announced layoff plans.

But if you listen to Ballmer (see John Fontana's great article), Microsoft has a huge year ahead of them in 2009, including bringing out a smaller "Foundations" server offering, Office Live, Windows 7, new versions of Sharepoint and Exchange, and taking Windows Azure off the beta leash. Ballmer's clearly signaling slowness in PC OS sales and increased competition from Apple, Linux and Google Android, but neither the economy or competitors are holding Microsoft back from big plans. And (again) that's exactly how I think Microsoft should proceed.

I expect we'll see the Microsoft juggernaut continuing to charge on even with the economic challenges businesses are facing. But I'm also optimistic we'll see the economy pick up sooner than most of the doom and gloom cable analysts like to make us think. After all, bad news is their business model isn't it?

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