Microsoft chief Steve Ballmer has called for the reignition of a 'cost-conscious culture' at the software giant, but has also promised wage increases.
Microsoft, reeling from slower-than-expected sales of its core products, plans to cut costs throughout its businesses even as it boosts some employees' salaries to make sure they don't jump ship.
Steve Ballmer, Microsoft's chief executive, has asked all his top executives to "significantly reduce" some expenditures budgeted for the fiscal year.
In a seven-page memo sent to employees late last week, he wrote: "We all have a big incentive as shareholders to reignite the kind of cost-conscious culture that marked Microsoft's earlier years."
Ballmer, who usually sends a similar, goal-setting memo to his senior managers each February, also laid out seven overarching business priorities for the company. They include pushing forward with new Internet initiatives and computing devices, as well as continuing to expand older products such as Windows and Office, which still supply the bulk of its revenue.
The memo was distributed last Thursday, the same day the company announced that it would fall short of analysts' revenue and profit estimates for its current fiscal quarter, which ends December 31.
It was the first early profit warning from Microsoft since 1989, and sent rumors that the company would depart from history even more dramatically by announcing a major layoff.
In his memo, Ballmer rejected that possibility. "To be clear, resource reductions don't translate into employee layoffs," he wrote, though adding that the company will "reduce unfilled head count."
A Microsoft spokeswoman noted the company has about 5,000 unfilled jobs. She called the memo "just a candid conversation between Steve and our employees about goals and priorities for the next year," aimed partly at reassuring them that their jobs were secure. "It's not a reorganization; it's not a strategic shift," she stressed.
