Cracks in the Foundation

I've been reading all of the reports of job layoffs in practically every industry and location in the world. The one that's got me intrigued though is the 5000 job layoff at Microsoft. I don't really know what that means.

If all 5000 of the people laid off were paid $100,000 a year, that's only 500 million dollars. My guess is that most of those laid off weren't making that much. If you sold OS licenses averaging @ $90 each, it would take 5.55 million sales to make 500 million.

A company that supposedly has sold more copies of Vista (in general, at the same price!) than XP Pro in its first release year?

A company that “owns” 90% of the computer desktops in the entire world has to layoff some of its personnel? That's not only the OS but the office applications as well. Vista may not have increased in price but MS Office certainly did.

A company who's net worth dwarf's the GDP of over 90% of the countries in the world?

A company that is cited as having the fattest cash reserves of most corporations world-wide? Its not a case of needing the cash to pay those people.

What's going on really?

If Microsoft just scaled back on its advertising budget it could save some of those jobs. I get dozens of industry trades at work. No matter the magazine's editorial focus, Microsoft has at least 2 or 3 full pages in each one. There are so many ads from them and IBM that they've become the “noise floor” for all the other ads in the magazines so I doubt anyone “reads” the Microsoft or the IBM ads.

I also doubt that the layoff's mean anything but a signal to create churn in the stock market. Everybody else is laying off, so Microsoft decides they need to do a little fat trimming. Its a PR move to look fiscally responsible and push the stock price back up..

Its cynical and mean spirited. Its business as usual. Its Microsoft.