Microsoft, the world's largest software company, announced that the company would initiate layoffs of 5000 workers, starting with 1400 job layoffs on Thursday. This was due to a severe decline in sales of personal computer softwares caused by economic uncertainty across the world. The company's second-quarter results show an 11 percent drop in net income, from $4.71 to $4.17 billion, in the period of a year.
Microsoft's chief executive, Steven A. Ballmer, admitted the difficulty the company is going through during a conference call, "we are certainly in the midst of a once-in-a-lifetime set of economic conditions".
In addition, Mr. Ballmer also revealed how the company will react to this economic crisis. According to him, Microsoft believes that it will take a while for the economy to get back on the track and thus the company will invest in opportunities that pose brighter future, rather than making a quick rebound to a current problem.
Mr. Ballmer said, "even as we take out 5,000 jobs, we will also add a few thousand jobs back into areas like search where we continue to see incredible opportunity to do good work".
It seems that Microsoft will depend on its entertainment business, which was prosperous in the second quarter, in order to go over such a difficult economic time. A record of six million Xbox gaming console were sold in the last quarter, securing the Microsoft dominant position in entertainment market.
Mr. Ballmer was still optimistic regarding the long-term position of the company in the technology industry. He insisted, “I don’t think there is any stopping the forward march of this industry or of Microsoft. It is a pause, and there will be renewed strong growth in the technology industry over all and certainly at Microsoft.”
Opinion: Microsoft being the largest software company in one of the most prosperous industry, the layoffs of the company means alot and shows how difficult of an economic time businesses are going through. I agree with Microsoft's plan to investigate causes of such a economic turmoil and promising opportunities rather than making a direct rebound to the current problems. Such a plan will allow the company to discover the underlying causes of its company's downturns and figure out what they can do to survive in the time of depression. Also, I believe Microsoft should invest more in its most prosperous business, entertainment section. For now, entertainment section is the most promising source from which the company can earn money. However, Microsoft should come up with a new entertainment system as there are many other competitive companies, such as Sony and Nintendo, that see the entertainment business as their way out of this turmoil.
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