Microsoft layoffs here, too

February 3, 2009

By Chantelle Lusebrink

Big local businesses, like Starbucks and Washington Mutual Bank, have been cutting employee costs for months, and Microsoft is joining their ranks.

Worldwide, 1,400 employees were laid off from the company Jan. 22. Up to 3,600 additional layoffs are expected within the year in areas such as marketing, legal, human resources, information technology, finance, sales, and research and development, a Jan. 22 press release from the company said.Roughly 872 employees were laid off throughout the Puget Sound area, said Dan Trimble, the city’s economic development director.

However, he said he wasn’t sure how many were laid off from the Issaquah campus. In the 2008 Issaquah Chamber of Commerce Directory, Microsoft listed having 1,839 employees at the Issaquah campus.

“The majority of last week’s announcements were in Redmond, consistent with the high concentration of employees based at our headquarters in the Puget Sound area,” a Microsoft spokesperson wrote in an e-mail.

The spokesperson declined to comment on the number of employees laid off from the Issaquah campus.

“It was a cross company layoff announcement, which means it ranged across all the various divisions and departments,” the spokesperson wrote. “Unfortunately, this is all we have to share.”

Other cost reductions will occur by limiting facilities, capital expenditures and marketing, the release said. The cost reductions will reduce capital expenditures by about $700 million in 2009.

At the Microsoft campus in Issaquah, several employees declined to comment on the recent layoffs as they hustled in and out of the lobby.

Without knowing how many jobs were lost in Issaquah, Trimble said he couldn’t say specifically what the effect to the city would be. However, because Issaquah only had a portion of the 872 job losses, the effect on the city’s economy probably won’t be that significant, especially since Issaquah has a fairly diverse economy, he said.

“I think it is important to see if this is going to be a long-term adjustment, or if it is going to be a short-term cycle that we need to continue to move forward through,” he said.

He also said that even though Microsoft is beginning employee layoffs the company still grew by 2 percent last year.

The company posted $16.63 billion in revenues for the second quarter, which ended Dec. 31, a 2 percent increase over the same period last year, the Jan. 22 press release said.

“There are different cycles in the economy,” Trimble said. “I think we always want to know where we are, but panicking because there are some layoffs isn’t always a rational, good choice.”

For example, the city’s retail sale revenue is down about 5 percent to 7 percent from last year, Trimble said.

“We can focus on how it is down 5 percent to 7 percent or focus on how it is 94 percent of what we had last year, which was a record year in retail sale revenues,” he said.

And even though city officials have held the line regarding what they are spending this year, the city still has double the money in its reserves than what is required, he added.

What is good to recognize is that “people are going through a transition and will possibly need assistance,” he said. “We want to make sure we focus on human services at this time and also focus on economic opportunities for those companies that are doing well.”

City officials are making sure any services they can provide for employees recently laid off, or people experiencing financial hardship, are available to residents, Trimble said.

“My first suggestion, for people new to needing help, is that they call 211,” said Steve Gierke, the city’s human services director. “That will connect them to any of the services they may need, whether that is employment services or food services or counseling services, whatever they need to get connected to resources.”

The number is a state hotline service where people can get one-on-one assistance guiding them to resources to help them weather tough financial times.

The city doesn’t provide specific services, but does support groups in the area that do, Gierke said.

“As things progress, whether that is a week or a month out, depending on severance, we have our food banks and Issaquah Church and Community Services,” he said.

Those organizations provide food, housing, utilities and clothing assistance.

Microsoft officials are also helping employees find new positions, inside or outside the company.

“Some jobs currently open will be filled by those affected by the layoffs, and for others, we will provide generous severance, as well as outplacement services to help their search for a new job,” the spokesperson wrote.

Additionally, the city has other employers like Boeing, Siemens and Costco, which are also a measure for economic stability.

“There are always things we can do, in terms of making sure we are business friendly,” Trimble said. “Issaquah, like I said, wants to be long-term focused.”

Reach Reporter Chantelle Lusebrink at 392-6434, ext. 241, or clusebrink@isspress.com. Comment on this story at www.issaquahpress.com.

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