It looks like the fantasy that tech was going to pull everything out (did anyone really believe this) has been torpedoed twice, is dead in the water and is listing 12 degrees to port.
Microsoft Corp. will cut 5,000 jobs, or about 5 percent of its workforce, as the global recession eats into demand for software.
The reductions, Microsoft's first companywide firings, will take place in nearly all areas, including research, sales and marketing, the company said today in a statement. The measure, announced with the company's second-quarter earnings, will save $1.5 billion, Microsoft said.
Chief Executive Officer Steve Ballmer is under pressure to reduce costs as sales growth dries up in what may be the worst recession since World War II. The company's Windows division, which accounts for about a quarter of sales, is suffering after personal-computer shipments rose at the slowest rate in six years in the fourth quarter.
Doing the monkey-boy dance isn't likely to save things for Microsoft, which, like it or not, faces increasing irrelevancy and timing of a product cycle that isn't doing it any favors. Vista is a disappointment and Windows 7 isn't likely to help much. There are just so many new tricks you can squeeze into an operating system and until Windows cooks perfect toast in the morning, we've hit the point of diminishing marginal returns. This, combined with the Microsoft-Intel chain gang effect puts old Steve in the spotlight while chained by the ankle to Woody Allen. There are fates worse than death, but not many.
Microsoft Cuts 5,000 Jobs as Recession Curbs Growth [Bloomberg]