Microsoft Layoff Hits Gaming, Online Services, Real Estate

1/23/09Follow @gthuang

A day after the largest layoff in Microsoft history—1,400 jobs cut yesterday, with up to 5,000 in the next year and a half—the ripples are spreading far and wide throughout the technology and business communities. Here’s a snapshot of where the cuts are happening in the Seattle area.

—Microsoft’s ACES studio, the Redmond, WA-based group behind the Microsoft Flight Simulator series, has been shut down, according to Gamasutra. VentureBeat also reports that 30 percent of Microsoft’s video game testers have been let go. And at least two members of the company’s Gamerscore Blog are also casualties. So it looks like the cutbacks are hitting some of Microsoft’s gaming divisions hard.

—Microsoft is cutting back in areas where its growth prospects are small or several years away, such as online services outside the United States. That’s according to Bloomberg, which cites an interview with Microsoft’s chief financial officer, Chris Liddell. Areas in which the company is projecting substantial growth, such as Internet search, mobile software, and Web-based software, will continue to receive investment.

—On the real estate front, the Puget Sound Business Journal reports that office-space rents on the Eastside could drop 15 to 20 percent as Microsoft pulls out of parts of its leased space in Redmond, Bellevue, and Kirkland. With vendors, contract workers, and surrounding businesses also suffering from the Microsoft cutbacks, we’re sure to see the ripples from this week spread even further.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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