Thousands of Microsoft employees are facing layoffs as the company struggles to maintain profitability in an increasingly grim worldwide economic downturn.
The Independent says that between ten and 17 percent of the company's workforce, representing up to 15,000 jobs worldwide, could be hit by the cuts. The company is being affected by slowing demand at both the retail and business levels, resulting in reduced sales of the Windows operating system as well as licenses for corporate software like Microsoft Office. Profits at the company's MSN business is also under threat as the growth in advertising revenues has "decelerated sharply."
A ten percent reduction in employees could save the company $1.2 billion per year, but Fudzilla claims the cut will actually go as deep as 17 percent, adding that MSN might be "carrying the brunt of the layoffs." Microsoft EMEA (Europe, Middle East and Africa) is also expected to be harder hit by the layoffs than the North American operations, but GamesIndustry predicts that the profitable Entertainment and Devices division will likely emerge from the cuts largely unscathed.
"The prevailing wisdom on Microsoft is that the company may pre-announce disappointing December results," Oppenheimer & Co analyst Brad Reback said. "Should such headcount reductions materialize, we would view them as a positive sign that management is interested in preserving the company's operating margin structure through the downturn."
The news comes in the wake of similar rumors at Sony, which is expected to announce major layoffs of its own early in February. Sony announced large-scale cuts in December but a company rep denied the reports of further restructuring, telling Reuters, "We don't have any such plan." Analysts, however, are saying the company's current plan to save $1.1 billion is inadequate to secure future growth.
johnx61: Ok, first we had a article about the playstation disappearing, now we have an article saying that the 360 is in trouble.
Fishy.
Seems to me that most of the layoffs are coming from non-game related sections of Microsoft, but who knows? I'm just trying to stay optimistic.
I'm just concerend about one thing and one thing only. That Nintendo does not become the only game in town again, especially with their current views on the industry. If we lost Sony and Microsoft, game over! Real gamers would be screwed. 100% of games would be casual crap or Mario/Zelda rehashes.
Can you really imagine that? The entire gaming industry focused on making games for people who don't freaking play games?
johnx61: Ok, first we had a article about the playstation disappearing, now we have an article saying that the 360 is in trouble.
Fishy.
Seems to me that most of the layoffs are coming from non-game related sections of Microsoft, but who knows? I'm just trying to stay optimistic.
I'm just concerend about one thing and one thing only. That Nintendo does not become the only game in town again, especially with their current views on the industry. If we lost Sony and Microsoft, game over! Real gamers would be screwed. 100% of games would be casual crap or Mario/Zelda rehashes.
Can you really imagine that? The entire gaming industry focused on making games for people who don't freaking play games?
That's taking it a little too far, don't you think? If both Microsoft and Sony gave up the console race, which probably won't happen, developers would focus more "hardcore" games for the PC and the Wii. People would just have to make do with the lesser graphical oomph of the Wii, and developers would have to utilize the motion controls better. Graphics whores would be bound solely to the PC once again, as it used to be.
The problem is, Sony and Microsoft aren't primarily game companies, they're major electronics corporations that happen to have video game divisions. Video game divisions that can at any time be shut down if they become too costly for the stockholders to be happy about.
And it's not just the recession that's troubling. Sony and Microsoft's habit of catering exclusively to "HARDCORE" gamers sounds fine on paper, but it means that they're not very welcoming to new gamers, which means we could be heading for a similar crisis to the comic book crash in the 90's. So the third-party developers would have to crawl to Nintendo on their knees.
On the other hand, if this did happen, there'd be so much fan pressure for Nintendo to take them in that they might listen. Right now most people aren't pressuring Nintendo for these kinds of games because they don't need to. If all of a sudden they DID need to...
Sylocat: The problem is, Sony and Microsoft aren't primarily game companies, they're major electronics corporations that happen to have video game divisions. Video game divisions that can at any time be shut down if they become too costly for the stockholders to be happy about.
And it's not just the recession that's troubling. Sony and Microsoft's habit of catering exclusively to "HARDCORE" gamers sounds fine on paper, but it means that they're not very welcoming to new gamers, which means we could be heading for a similar crisis to the comic book crash in the 90's. So the third-party developers would have to crawl to Nintendo on their knees.
On the other hand, if this did happen, there'd be so much fan pressure for Nintendo to take them in that they might listen. Right now most people aren't pressuring Nintendo for these kinds of games because they don't need to. If all of a sudden they DID need to...
We would have nintendo of the 80s and early 90s *shudder*. I'm a bit of a nintendo fan myself, but wow, they acted like dicks at times when they were on top. Took the PS2 to introduce the idea of being humble.
Sylocat: The problem is, Sony and Microsoft aren't primarily game companies, they're major electronics corporations that happen to have video game divisions. Video game divisions that can at any time be shut down if they become too costly for the stockholders to be happy about.
And it's not just the recession that's troubling. Sony and Microsoft's habit of catering exclusively to "HARDCORE" gamers sounds fine on paper, but it means that they're not very welcoming to new gamers, which means we could be heading for a similar crisis to the comic book crash in the 90's. So the third-party developers would have to crawl to Nintendo on their knees.
On the other hand, if this did happen, there'd be so much fan pressure for Nintendo to take them in that they might listen. Right now most people aren't pressuring Nintendo for these kinds of games because they don't need to. If all of a sudden they DID need to...
We would have nintendo of the 80s and early 90s *shudder*. I'm a bit of a nintendo fan myself, but wow, they acted like dicks at times when they were on top. Took the PS2 to introduce the idea of being humble.
Maybe Google will come out with a video game division, to provide some competition. Given how they're branching out into everything, it's not impossible.
Sylocat: The problem is, Sony and Microsoft aren't primarily game companies, they're major electronics corporations that happen to have video game divisions. Video game divisions that can at any time be shut down if they become too costly for the stockholders to be happy about.
And it's not just the recession that's troubling. Sony and Microsoft's habit of catering exclusively to "HARDCORE" gamers sounds fine on paper, but it means that they're not very welcoming to new gamers, which means we could be heading for a similar crisis to the comic book crash in the 90's. So the third-party developers would have to crawl to Nintendo on their knees.
On the other hand, if this did happen, there'd be so much fan pressure for Nintendo to take them in that they might listen. Right now most people aren't pressuring Nintendo for these kinds of games because they don't need to. If all of a sudden they DID need to...
We would have nintendo of the 80s and early 90s *shudder*. I'm a bit of a nintendo fan myself, but wow, they acted like dicks at times when they were on top. Took the PS2 to introduce the idea of being humble.
Maybe Google will come out with a video game division, to provide some competition. Given how they're branching out into everything, it's not impossible.
Or maybe on the eve of the PS3 and 360's deathbeds, the long-rumored Dreamcast 2 will be officially announced, returning us full circle back to the glory days of Nintendo VS Sega for the console championships.
Or maybe on the eve of the PS3 and 360's deathbeds, the long-rumored Dreamcast 2 will be officially announced, returning us full circle back to the glory days of Nintendo VS Sega for the console championships.
Major Layoffs Coming To Microsoft
Thousands of Microsoft employees are facing layoffs as the company struggles to maintain profitability in an increasingly grim worldwide economic downturn.
The Independent says that between ten and 17 percent of the company's workforce, representing up to 15,000 jobs worldwide, could be hit by the cuts. The company is being affected by slowing demand at both the retail and business levels, resulting in reduced sales of the Windows operating system as well as licenses for corporate software like Microsoft Office. Profits at the company's MSN business is also under threat as the growth in advertising revenues has "decelerated sharply."
A ten percent reduction in employees could save the company $1.2 billion per year, but Fudzilla claims the cut will actually go as deep as 17 percent, adding that MSN might be "carrying the brunt of the layoffs." Microsoft EMEA (Europe, Middle East and Africa) is also expected to be harder hit by the layoffs than the North American operations, but GamesIndustry predicts that the profitable Entertainment and Devices division will likely emerge from the cuts largely unscathed.
"The prevailing wisdom on Microsoft is that the company may pre-announce disappointing December results," Oppenheimer & Co analyst Brad Reback said. "Should such headcount reductions materialize, we would view them as a positive sign that management is interested in preserving the company's operating margin structure through the downturn."
The news comes in the wake of similar rumors at Sony, which is expected to announce major layoffs of its own early in February. Sony announced large-scale cuts in December but a company rep denied the reports of further restructuring, telling Reuters, "We don't have any such plan." Analysts, however, are saying the company's current plan to save $1.1 billion is inadequate to secure future growth.
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