Up to 15,000 jobs worldwide are at risk as the computer software giant prepares for first layoffs in its 32-year history.
The latest to report on the possibility of layoffs at the software giant is the blog Fudzilla, which puts the number of job cuts at 15,000, or nearly 17 percent of Microsoft's worldwide operations. The January 15 date is a week before Microsoft's second-quarter earnings report, scheduled for January 22.
Microsoft also has a briefing for financial analysts planned for January 8 at the Consumer Electronics Show in Las Vegas, with the headliner listed as Robbie Bach, president of the entertainment and devices division.
Those purported layoff numbers are up from earlier rumors, which suggested that 10 percent of the company's employees would lose their jobs.
Fudzilla sees the biggest hit coming for the MSN unit, where Yusuf Mehdi recently took over as marketing chief while the company continued to look for an executive to run its overall online services group:
So far, we haven't managed to confirm what departments or regions will be hit the worst, but we're hearing that MSN might be carrying the brunt of the layoffs. We're also hearing rumors about the possibility of somewhat larger staff cuts at Microsoft EMEA (Europe, Middle East and Africa).
It's unlikely that Microsoft will be laying off a lot of people in departments and regions that are doing well, and considering the recent upturn in console sales, we have a feeling that at least most of the people working in the Xbox 360 departments will be pretty safe.
Wall Street veteran Henry Blodget says the target areas mentioned by Fudzilla make sense, but not the high volume of job cuts:
Unless Microsoft's business has been absolutely crushed in the past two months, there is no reason for the company to suddenly cut this much cost. Microsoft's margins are still fine, and much of its revenue is generated from multi-year contracts (and is therefore unlikely to see a massive intra-quarter hit).
In October, word leaked out of Microsoft that it would be closing its MSN Groups service on February 21, to be replaced with Windows Live Groups.
Blodget sees potential for a restructuring in Redmond that would fit into the long-running, on-again-off-again Microhoo saga:
The only way we could see Microsoft laying off this many people is if the company decided to eliminate business units. And if Microsoft did decide to restructure its business, it would likely sell rather than shut down divisions, including MSN (If Microsoft wants to get out of the consumer Internet business, which it should, the best way to do it is to spin its online operations into Yahoo in exchange for a big piece of the company.)
Credits to CNET News
Showing posts with label Financial Crisis. Show all posts
Showing posts with label Financial Crisis. Show all posts
Sunday, January 4, 2009
Tuesday, November 18, 2008
Online retail spending slows to a crawl in October
Consumer spending on e-commerce sites grew just 1 percent during October compared with the same month a year ago, according to ComScore.
In fact, last month was the worst growth month for online retail spending since ComScore began keeping track in 2001.
Rising prices and unemployment rates, and the psychological impact of the chaos of the financial markets are to blame, according to ComScore Chairman Gian Fulgoni.
But the dip in spending can't be too much of a shock to those who watch ComScore's monthly reports carefully. The preceding six months featured declining growth rates--April saw 15 percent growth, and by August spending online had increased just 8 percent.
Spending has dropped off the most for households that make below $50,000 per year, according to ComScore's figures. From August to October this year, their spending dropped 3 percent compared with the same period last year. For households making between $50,000 and $100,000, their spending increased 1 percent. Households making more than $100,000 increased their spending during that time by 14 percent.
Retailers both online and off are fretting how the economic downturn will affect this year's holiday sales. E-commerce giants Amazon.com and eBay both offered dim holiday outlooks during their third-quarter earnings reports.
In response, earlier this month ComScore recommended that online retailers should seriously consider generous coupon offers and free shipping to encourage consumers to spend in the coming months.
Source: CNET NEWS
In fact, last month was the worst growth month for online retail spending since ComScore began keeping track in 2001.
Rising prices and unemployment rates, and the psychological impact of the chaos of the financial markets are to blame, according to ComScore Chairman Gian Fulgoni.
But the dip in spending can't be too much of a shock to those who watch ComScore's monthly reports carefully. The preceding six months featured declining growth rates--April saw 15 percent growth, and by August spending online had increased just 8 percent.
Spending has dropped off the most for households that make below $50,000 per year, according to ComScore's figures. From August to October this year, their spending dropped 3 percent compared with the same period last year. For households making between $50,000 and $100,000, their spending increased 1 percent. Households making more than $100,000 increased their spending during that time by 14 percent.
Retailers both online and off are fretting how the economic downturn will affect this year's holiday sales. E-commerce giants Amazon.com and eBay both offered dim holiday outlooks during their third-quarter earnings reports.
In response, earlier this month ComScore recommended that online retailers should seriously consider generous coupon offers and free shipping to encourage consumers to spend in the coming months.
Source: CNET NEWS
Goodbye Circuit City
When Circuit City announced on Monday that it was closing 155 stores amid financial trouble, it didn't surprise me at all. If you've been following this page over the past year and a half, you know that I've been saying since the beginning that Circuit City doesn't have the chops to stick around and compete with Best Buy.
Circuit City (Credit: Circuit City)
And although yesterday's announcement was probably a shock to some at the company, it shouldn't have been. For the past few years, Circuit City has been the victim of one of the steepest declines this industry has ever seen.
Right now, the stock is in danger of being delisted from the New York Stock Exchange, thanks to a share price that can't make its way above the $1 mark. In fact, even after announcing the closure of 155 stores, the company's shares rose only 10 cents in daytime trading, bringing its stock price to 36 cents per share.
We can't forget, upon analyzing Circuit City, that this isn't the end of store closures, nor the beginning of financial success. The company is now going to engage landlords in negotiations to "aggressively" reduce rental rates in stores nationwide.
Once that initiative fails--and it will--Circuit City will have no other option but to close even more stores as it tries to find the right balance between size and financial stability.
To make matters worse, it will be delisted from the NYSE. I simply don't see any way the stock price can gain almost 70 cents in a short amount of time to get regulators off the company's back. And once that happens, any influx of cash Circuit City was hoping for will be lost, and it will be forced to close even more stores.
The end is near for Circuit City. Its decision to close 155 stores was an opening salvo in the hopes that shareholders would take notice and believe the company had the ability to turn things around.
Unfortunately for Circuit City, the shareholders didn't fall for it.
The company may be an attractive target for at least one company in the industry. After all, CompUSA was picked up by TigerDirect, and now some CompUSA stores are open in Florida.
But then again, maybe Circuit City isn't as attractive to acquiring companies as it wants to believe. Maybe companies realize that Circuit City is a dog and will never be able to compete with Best Buy in brick-and-mortar stores or Amazon.com online. Maybe they realize that with a stock that's in serious danger of being delisted, it has no hope of repairing shareholder confidence. And maybe they realize that Circuit City's days are numbered, regardless of the amount of cost cutting and expense slashing in which the company engages.
I've said it once, and I'll say it again: Circuit City is a dying company with no viability to, well, anyone. With Best Buy and online retailers squeezing it out of the market, I honestly don't believe that Circuit City will be around even a year from now. Strapped for cash, facing an avalanche of competition, and in desperate need of solid revenue, Circuit City looks like company that simply can't survive in today's hotly contested environment.
The game is over. And Circuit City lost.
Source: CNET NEWS
Circuit City (Credit: Circuit City)
And although yesterday's announcement was probably a shock to some at the company, it shouldn't have been. For the past few years, Circuit City has been the victim of one of the steepest declines this industry has ever seen.
Right now, the stock is in danger of being delisted from the New York Stock Exchange, thanks to a share price that can't make its way above the $1 mark. In fact, even after announcing the closure of 155 stores, the company's shares rose only 10 cents in daytime trading, bringing its stock price to 36 cents per share.
We can't forget, upon analyzing Circuit City, that this isn't the end of store closures, nor the beginning of financial success. The company is now going to engage landlords in negotiations to "aggressively" reduce rental rates in stores nationwide.
Once that initiative fails--and it will--Circuit City will have no other option but to close even more stores as it tries to find the right balance between size and financial stability.
To make matters worse, it will be delisted from the NYSE. I simply don't see any way the stock price can gain almost 70 cents in a short amount of time to get regulators off the company's back. And once that happens, any influx of cash Circuit City was hoping for will be lost, and it will be forced to close even more stores.
The end is near for Circuit City. Its decision to close 155 stores was an opening salvo in the hopes that shareholders would take notice and believe the company had the ability to turn things around.
Unfortunately for Circuit City, the shareholders didn't fall for it.
The company may be an attractive target for at least one company in the industry. After all, CompUSA was picked up by TigerDirect, and now some CompUSA stores are open in Florida.
But then again, maybe Circuit City isn't as attractive to acquiring companies as it wants to believe. Maybe companies realize that Circuit City is a dog and will never be able to compete with Best Buy in brick-and-mortar stores or Amazon.com online. Maybe they realize that with a stock that's in serious danger of being delisted, it has no hope of repairing shareholder confidence. And maybe they realize that Circuit City's days are numbered, regardless of the amount of cost cutting and expense slashing in which the company engages.
I've said it once, and I'll say it again: Circuit City is a dying company with no viability to, well, anyone. With Best Buy and online retailers squeezing it out of the market, I honestly don't believe that Circuit City will be around even a year from now. Strapped for cash, facing an avalanche of competition, and in desperate need of solid revenue, Circuit City looks like company that simply can't survive in today's hotly contested environment.
The game is over. And Circuit City lost.
Source: CNET NEWS
Monday, November 10, 2008
Circuit City files for Chapter 11
"Another one bites the dust..." - This week opened with the bankruptcy of big electronics company Circuit City, a result of the downturn in the economy that recently has led shoppers to cut back on discretionary purchases.
Chapter 11 allows a company to hold off creditors while it attempts to restructure its finances. Circuit City said Monday that it has has negotiated a commitment for a $1.1 billion debtor-in-possession revolving credit facility to supplement its working capital.
Circuit City announced earlier this month that it would shutter 155 stores and lay off 17 percent of its workforce. The retailer said Monday that it will eliminate an additional 700 positions in addition to the reductions resulting from the store closings, bringing the total layoff projection to around 20 percent of its employees. According to the company's FAQ, in February it had approximately 45,900 employees, not including workers taken on during peak selling periods.
"We appreciate the support we have received from our lenders in the midst of such a tight credit market," acting CEO and vice chairman James A. Marcum said. "With this support, we believe we have the opportunity to leverage our market position and the strength of our brand to restore Circuit City to solid financial footing."
Credits to CNET NEWS
Chapter 11 allows a company to hold off creditors while it attempts to restructure its finances. Circuit City said Monday that it has has negotiated a commitment for a $1.1 billion debtor-in-possession revolving credit facility to supplement its working capital.
Circuit City announced earlier this month that it would shutter 155 stores and lay off 17 percent of its workforce. The retailer said Monday that it will eliminate an additional 700 positions in addition to the reductions resulting from the store closings, bringing the total layoff projection to around 20 percent of its employees. According to the company's FAQ, in February it had approximately 45,900 employees, not including workers taken on during peak selling periods.
"We appreciate the support we have received from our lenders in the midst of such a tight credit market," acting CEO and vice chairman James A. Marcum said. "With this support, we believe we have the opportunity to leverage our market position and the strength of our brand to restore Circuit City to solid financial footing."
Credits to CNET NEWS
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