Layoffs at Microsoft

There has been some bad news at Microsoft recently. Revenue from Windows sales has been low. This is causing the company to miss their earnings estimate for 2Q09. Nobody seems immune from the bad economy.

An outcome of the bad quarter is that Microsoft is laying of 5,000 people. Now Microsoft is a big employer, currently employing about 95,000 people. So this amounts to a little more than 5% of the workforce.

The real damage is in the image. Microsoft is one of those companies that used to dominate earnings year after year. My concern is that this may result in a pullback in product development. We shall see.