January 24, 2009 by James Oliver
Steve Ballmer, Microsoft CEO is instigating a companywide cost-cutting regime in response to the continued economic strife. “We’re certainly in the midst of a once-in-a-lifetime set of economic conditions,” said Ballmer during a conference call to analysts this week. The major costs being cut are, as usual, staff. Microsoft will axe 5000 jobs in a process Ballmer is describing as “putting the brakes on.”
Computing and the tech industry in general has been one of the sectors hit harder by the recession – when money’s tight it naturally makes you more inclined to make do with your current system, rather than spend on that new computer or software update.
Companies need to move forward and grow constantly to maintain their position, share price etc. The unique issue for Microsoft is that growth along the traditional lines of the company is pretty hard to come by as most computer systems already run Windows. Other attempts to grow, say through the acquisition of Yahoo have hit snags to say the least.
Another way they can gain market share is by pouring money into something like live search, or Internet Explorer or another one of their struggling online ventures. This is obviously not a particularly tempting option as it could be very expensive and comes with no guarantees.
The only real way to beat the recession is innovation. If Microsoft could come up with that big ‘game changing’ idea then they’d be in a strong position. Unfortunately they’ve just sacked 5000 of the people they’d need to do that.
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