Microsoft executive says layoffs offset by more R&D

Up to 3,000 employees could be needed for Microsoft’s research efforts this year, in part offsetting layoffs announced in January, a top company executive said Tuesday.

Microsoft’s Chief Operating Officer Kevin Turner said during a keynote speech at the Cebit trade show that the remainder of this year will continue to be challenging as the global economy faces a severe downturn.

Microsoft said in January it would cut 5,000 positions as it saw its net income fall 11 percent for the quarter ending Dec. 31. The company said the job cuts would come in marketing, sales, finance, legal and human resources among other areas over the next 18 months.

Turner said Microsoft plans to spend US$9 billion on research this year, US$1 billion more than 2008. New positions will be created as the company analyzes its business, he said.

“This alignment and realignment will also allow us to reassign some employees to new priorities and that we may create 2,000 to 3,000 new jobs over the same time frame as we continue to invest in new growth opportunities,” Turner said.

Turner said the world economy saw incredible growth for many years but that it was fueled by an increase in consumer debt. He said the economy will have to “reset” itself, centering more on innovation and growth rather than growing private debt.

Part of Microsoft’s research efforts are centered in Europe, including the company’s U.K. research facility and a search technology center in Munich, Germany. Microsoft said last October it would also do search research in London and near Paris. Microsoft has sought so far unsuccessfully to unseat Google as the most-used search engine.

Turner said Microsoft will focus on so-called cloud computing and software as a service, where remote data centers do the computing and deliver the results to client computers.

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Jim Love, Chief Content Officer, IT World Canada

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