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January 20, 2009

Microsoft plans Redmond real estate freeze

Posted by David Hunter at 1:26 PM ET.

Joseph Tartakoff at the Seattle PI has seen an internal presentation describing how Microsoft will be retrenching in Redmond area real estate in view of the economic downturn:

An internal planning and scenario PowerPoint presentation reviewed by the Seattle P-I shows that Microsoft is set to delay the construction of all new buildings in Redmond, except one, for at least three years. The company also will not renew most of its leases when they come up for renewal this year and next.

According to a Microsoft spokesman, some of these leases would not have been renewed in the normal course of events as employees moved to newly leased or constructed space. Also, active construction will not stop and Microsoft will still occupy new office space in Bellevue that they had leased last year.

The changes are driven by the deteriorating global economic situation, which has led to a steep hiring slowdown by Microsoft. It is unclear whether the company will lay off any employees, as has been rumored, this week.

But the presentation shows that in December, Microsoft’s Real Estate and Facilities Team developed a scenario to estimate the company’s real estate needs under the assumption that the company’s work force would not grow for the next 2 1/2 years. Beyond then, the planners expected annual growth of 3 percent.

There are more details in the article including estimated cost savings and recent Seattle area hiring numbers, but it reads to me like an accommodation of a hiring freeze, not provision for any wide scale layoffs – exactly as the above scenario describes.



Filed under Financial, General Business, Layoffs, Microsoft, Real Estate

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