BulletProofBlog the blog on crisis communications

The news that Microsoft plans to eliminate 5,000 jobs - or five percent of its workforce - serves as proof positive that no company is immune to the effects of the current global economic meltdown. That the financial crisis has metastasized this far up the corporate food chain to a company that many thought was well-insulated means that the road ahead is rougher and longer than anybody thought.

Microsoft has never initiated layoffs on such a scale before, and - in a way - this milestone in the development of a corporate giant is just another sign of its maturity. The luster it had in the mid-1990s dulled only slightly over a decade that brought a landmark federal antitrust suit and a hard charge from the competition - but now, it must deal with the same economic realities as all other companies. Brand name and global recognition are no longer enough to drive sales ever upward. The company has acknowledged a downturn; now it must demonstrate that it is ready to move forward.

Microsoft is already off to a good start. By announcing the layoffs on the same day it released a less-than-stellar earnings report, it shortened the timeline for negative news. By getting all of the bad news out at once, Microsoft positioned itself as looking forward, not in the rear view mirror. A tough call, of course - but the right one.

Now, the job is to demonstrate just how the company' s response - which is not unlike what many other companies around the world are now experiencing - is going to enable it to prosper in the moths and years to come. With a focus on how cuts on the cost side of the ledger will translate into gains on the revenue side, further global outreach, or new marquee acquisitions, the company can continue to propel itself forward.

Nobody doubts that Microsoft is going to be around for quite a while; but that doesn' t lessen the challenge at hand.