Marketing job cuts expected to hit Microsoft

Marketing job cuts expected to hit Microsoft

Summary: Rumors that Microsoft may be poised to cut hundreds of employees, largely in marketing, are circulating.

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I've been hearing the same thing that Dina Bass of Bloomberg has -- that Microsoft is planning to make headcount cuts, largely affecting its marketing organization some time soon.

Bass reported on January 11 that Microsoft is "making plans for a companywide restructuring of its marketing operations, a move that may include hundreds of job cuts."

One of my contacts said 40 percent of the Central Marketing Group (CMG) could be chopped -- a number which seemed crazily high to me. CMG drives all the marketing and communications across all Microsoft businesses and products around the world.

Update: Maybe the 40 percent cut isn't as crazy as it sounds. Another of my contacts says that CMG has about 600 full time employees at present, plus more than 2,000 outside contractors on the payroll.

Another of my contacts said the coming cuts should be thought of more as a "pruning" than a chopping.

Among the rumors I've heard is both Windows Phone and the Server and Tools business will be re-org'd and possibly take some of the marketing headcount losses. At the end of last year, Microsoft announced a change in leadership in Windows Phone. And Robert Wahbe, the head of Server and Tools Marketing, is leaving the company in February, I reported earlier this week.

Microsoft officials are not commenting on the rumored cuts or reorgs. But with Microsoft due to report earnings for its second fiscal quarter on January 19, word could trickle down soon.  (It's mid-year review time at Microsoft right now, as its fiscal year begins on June 1.)

Microsoft cut 5,000 jobs three years ago, with CEO Steve Ballmer saying at that time that he couldn't guarantee there might not be further cuts at some time.

Topics: Microsoft, IT Employment

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • Jusy curios.. I read on CNN there was at least a threat

    at the very least by around 300 FOXCOM employee's to jump off a roof over salaries. Now I'm not posting this as an anti MS thing but it was from the division that makes the XBox 360 for some reason. Now to be honest I think this is a Foxcom issue first and a Chinese government issue second seeing that Foxcom is not owned by MS and it is that countries government responsibility to look after it's own people and I said that later in the year when the head lines were all about Apple and Foxcom. However fair is fair and I expect to see headlines about this here and fair reporting done on the issues and weather there was just a threat or actual suicides done over money/pay? It would seem at the very least Foxcom has issues that should be addressed and if people felt (Unfairly I might add) that Apple was the factor in this what do they feal about this now that it is MS and the XBox?

    Pagan jim
    James Quinn
    • Foxcon story is over here

      Here's the link on ZDNet: http://www.zdnet.com/blog/asia/chinese-workers-threaten-suicide-at-foxconn-not-8216why-but-8216is-enough-being-done/681

      MJ
      Mary Jo Foley
    • Par for the course in China

      @James Quinn ... "Foxconn told them they could either keep their jobs without it, or they could quit and be compensated. Many chose to quit, but the company terminated the agreement, and none of the former workers received the promised compensation."

      China has an absolute libertarian Hobbesiean state of nature in business. If you make a contract with someone and they don't honor it, you're just out. No court is going to help you.

      So doing business there is a bit like operating a criminal enterprise. You just have to assume everyone around you will turn on you at any moment, and you have to arrange things so either they are afraid to (afraid of you that is), or they have posted some some sort of collateral like a completion bond. Or given you their children as hostages or something.

      Those workers simply had nothing to bargain with.

      If I were running things, I'd have a 35% revenue tarrif on all goods coming out of countries which didn't have labor laws at least as strong as ours.

      They can mistreat their people any way they want. We don't have to be a party to it, and yet we are.
      HollywoodDog
      • RE: Marketing job cuts expected to hit Microsoft

        @HollywoodDog
        "absolute libertarian Hobbesiean state of nature in business"

        In other words, you have no idea what the word "libertarian" means or what the libertarians advocate, e.g., the rule of law, enforcement of contracts, freedom of assembly and negotiations (unions), independence of courts from political influence, etc...
        JohnMorgan3
      • Not to get too deep in the weeds

        @HollywoodDog ... but I've had libertarians earnestly make the case to me for taking the stoplights down and removing the lines from the roads.
        HollywoodDog
      • RE: Marketing job cuts expected to hit Microsoft

        @HollywoodDog (as well as all others)

        The Foxcom issue is a perfect example of what happens when you buy into the lie that open trade equates to free trade and that trade tariffs are anti-capital and not simply a way to help balance the scales when 2 competing entities are not operating on equal grounds.

        The only reason Foxcom and any other Chinese based entity gets American manufacturing business is because they can operate with what is effectively slave labor. The us did this in the past but eventually came to its senses and realized it was wrong for people to own people. The Chinese are not owned by the government but they are none the less treated like slaves when it comes to labor. Because the Chinese have little if any regulations affecting factory production they can out bid any other country for production services and so all American based corporations relocated their production to the slave labor country of China. No one and I mean no one can compete with China because of the outlandish government regulations present in America and the lack of any at all in China and only a money greedy corporate executive and a mindless follower of the corporations favorite political; party would believe otherwise.

        Free Trade does not equate to Open Trade. America took manufacturing from Canada ( many decades ago) back when one could operate manufacturing in the US without excessive government regulation and rules. Then manufacturing jobs moved south of the Border to Mexico once the regulations by Government in the US grew excessive. It became more profitable to run production in Mexico then here in the US. Eventually production moved to China once the costs in Mexico went up. The costs went up in Mexico not because of government excess but because the overall standard of living increased with the increase in production. Mexico???s standard of living never got to the level that the US had obtained at its height in manufacturing but that had more to do with the cheaper alternative of moving production to China than anything else.

        Now that most manufacturing is abroad America has lost its edge and is now losing its lead in industry and will very soon start a very ugly decent into a third world economy, all because corporations had to seek the lowest production costs because an out of control government in the US pushed the production jobs out of the US. Make no mistake, this movement of production jobs was happily embraced by large corporate executives who saw it as a way to pad profits and increase their bonuses over the short term. This is easily provable by examining the GIBSON corporations current production issues involving the US government.

        Over the last 2 years the US Government has sent law enforcement into GIBSONs domestic manufacturing plants in SWAT like raids (with weapons drawn) similar to what you???d see with drug raids on heavily armed gangs, all because the company was accused of ???working ??? wood domestically that was imported from overseas. In this case ???working??? is the act of taking some raw material and doing something to it before then assembling it with something else. Gibson Guitars was taking wood from India and working it to then be added to its Guitars. This is illegal (supposedly) because of treaties our government has made with other countries. While initially the government and media tried to claim that the issue was whether the wood was legally purchased by Gibson in the end it was shown that the legally purchased wood was altered in some way by US based labor and that was the illegal act that supposedly justified the US government sending in law enforcement with their guns drawn; not once but twice.

        CEO of Gibson Guitars has said in interviews that the trouble began only after the company declined to accept the governments offer to relocate the companies production overseas. That???s right,, the government wanted the company to relocate production outside of the US and whe3n Gibson declined that is when the government lead raids began. This should not only anger all of us but make you ask what else has government been doing to screw over our economy?

        NOTE: Everything about GIBSON GUITARS listed here is easily proven and has been verified by the corporations own CEO in various interviews so please don???t anyone try to say ???that???s conspiracy theory??? simply because you don???t want to believe that our government would act in this way.
        BlueCollarCritic
  • If they had axed Steve Balmer, they could have kept those 5,000 people

    they cut three years ago and the company would be allot better off today. As Balmers continues to line his pockets with billion every year does he ever wonder about all the little people he kicked to the street. We all know that answer "NOT on you life"
    Over and Out
    • No way, it's not Ballmer's fault the company is floundering

      @SoYouSaid ... it's the thousands of marketing people. It's all their fault. That's why they have to go.

      And all those list of executives who've been pushed out the door. All their fault.

      For example; Zune. All J. Allard's fault. And so on.

      Steve Ballmer is a genius, surrounded on all sides by incompetents. Wait till he writes his book.
      HollywoodDog
  • RE: Marketing job cuts expected to hit Microsoft

    As Pagan Jim repeated his post from the Thai flood story, I'll recap my analysis from over there.<br><br>No, not really. Just teasing Mr. Quinn.<br><br>But, sales clerk cash incentives, foreshadowing of down numbers because of floods in Thailand (force majeure, what you gonna do?) and now marketing staff cuts, check that, prunes.<br><br>Whatever they are saying next week, it looks to me as they expect it to slam the stock price, and so we are already getting the proaction in mitigation.
    DannyO_0x98
  • sinking ship!

    I've forcasted M$ demise for many years.
    The Linux Geek
    • RE: Marketing job cuts expected to hit Microsoft

      @The Linux Geek What a lousy forecaster you are !!!
      1773
    • RE: Marketing job cuts expected to hit Microsoft

      @The Linux Geek 2012...Year of the Linux desktop, right?
      goombawa
  • Wait are you saying their are MS marketing employees for windows phone?

    I have seen absolutely no evidence of such marketers so I find that VERY hard to believe. What have they been doing since WP7 was launched? I hope their salaries were based on WP marketshare gain. Somehow I dont think they will be missed.
    Johnny Vegas
    • RE: Marketing job cuts expected to hit Microsoft

      @Johnny Vegas

      Exactly. What they need to do is loop off the existing, under-performing marketing groups and replace them with top notch people.
      gribittmep
      • Save eve more money...

        @gribittmep round up the underperforming products, and replace them...
        Rick_Kl
    • More Laptop Hunters!

      @Johnny Vegas ... Paging the actress who played Lauren. How'd you like another 500 dollar PC laptop?
      HollywoodDog
    • Actually, Lauren has been getting some work. Good for her.

      @Johnny Vegas ...

      2012 The Humdrummer (post-production)
      Jessica

      2011 2 Scoops of Love (short)
      Kissing Girl

      2010 The Casting Couch (short)
      Eve Goodman

      2010 Sara Rose (short)
      Lilly

      2009 Nite Tales: The Series (TV series)
      Jennifer Peterson
      Dark Heart (2009) ??? Jennifer Peterson
      HollywoodDog
  • Not a good sign

    The number of people who actually participate in product positioning and the formulation of strategy is pretty small. So even if ads for, say, Windows Phone were ineffective, that would not account for layoffs of this nature. Most of these people would be involved in the vast amount of administrivia associated with booking and scheduling ads, paying the bills for the ads, and so on, all around the world.

    If Microsoft management has decided that they don't need the people who operate the mechanics of advertising and promotion on a large scale, then they must have decided that they are not going to do advertising and promotion on a large scale. Nokia is relying on these guys to help them get established in the U.S.? Not gonna happen.
    Robert Hahn
    • RE: Marketing job cuts expected to hit Microsoft

      @Robert Hahn - of course not. Microsoft wants Nokia to fall in price and they will buy them for a dime. Still won't work though. Windows Phones are doomed.
      The Danger is Microsoft
  • I feel bad for those people in this tough economy...

    ...but, Microsoft's marketing and advertising has just been so bad for so long. What a turn-around in Microsoft's image would be if Ballmer and the entire advertising crew were replaced in one shot with fresh blood in tune with the world. Ballmer's keynote at CES was just so...BALLMER. He is the Anti-Cool. No more Seinfeld commercials, no more empty "Your Potential Our Passion" staleness -- just create products with "Wow!" features and then actually show those features in commercials.
    JohnMorgan3