By Reporter staff
Microsoft’s cut of 1,400 employees Thursday will have little, if any, impact on space the company plans to lease or already leases in Bellevue. However, there will be impacts in Redmond.
Last year, Microsoft announced plans to lease space in The Bravern, now under construction at 112th Avenue Northeast and Northeast Eighth. That plan remain intact, sources say.
“We have not been notified about how this announcement will affect The Bravern, but it shouldn’t have a direct impact at all,” said Tom Woodworth, Schnitzer West, LLC – Senior Investment Director. “Microsoft is still moving ahead with the planning to occupy the smaller tower, 250,000 square feet, by Jan. 30. They plan to occupy the second building later this year.”
Woodworth added that the Microsoft divisions that are are the list of layoffs are not any of the divisions set to move into The Bravern.
Redmond projects are another issue.
The company reportedly plans to let leases expire on locations in Redmond and Seattle both this year and 2010. Reports also indicate the company will delay construction of all new buildings in the Overlake area of Bellevue, except one, for the next three years.
An underground parking garage on the main campus, for 1,900 cars, also will be delayed, although it is under construction.
Microsoft said Thursday that it will cut 5,000 employees over the next 18 months, including 1,400 immediately. The net effect on the local economy may be less since the company also is expected to add employees in some areas, making the job cut in the 2,000 to 3,000 range.
The cuts come as Microsoft on Thursday announced revenue of $16.63 billion for the second quarter ended Dec. 31, 2008, a 2 percent increase over the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $5.94 billion, $4.17 billion and $0.47, declines of 8 percent, 11 percent and 6 percent, respectively, compared with the prior year.
“While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach,” said Steve Ballmer, chief executive officer at Microsoft.
Added Chris Liddell, chief financial officer at Microsoft: “We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year.”
The majority of Thursday’s job eliminations (872 jobs) were in Redmond, consistent with the high concentration of employees based at Microsoft headquarters in the Puget Sound area. For most impacted employees, job responsibilities ended Friday, Jan. 23.
Microsoft said severance or job placement assistance would be offered to employees whose jobs are being eliminated.
“Some jobs currently open will be filled by those affected by the layoffs,” said a Microsoft spokesman. “For others we will provide generous severance and outplacement services to help their search for a new job. Severance benefits will be available to impacted individuals. While the specific severance benefits will vary by country, impacted employees in the U.S. may be eligible for a minimum of 60 days of pay, as well as severance pay that is calculated on tenure and level.”
