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2% of Microsoft's Fargo work force slashed

More Fargo workers are losing their jobs. The second round of Microsoft job cuts this year came Tuesday with fewer than 2 percent of Microsoft Fargo employees being laid off, according to Lou Gellos, Microsoft spokesman. Gellos would not release ...

Microsoft layoffs
Work continues Tuesday on the addition to the Microsoft campus to the west of the main office building in Fargo. Dave Wallis / The Forum

More Fargo workers are losing their jobs.

The second round of Microsoft job cuts this year came Tuesday with fewer than 2 percent of Microsoft Fargo employees being laid off, according to Lou Gellos, Microsoft spokesman.

Gellos would not release specific numbers.

There are slightly fewer than 1,000 employees at Microsoft Fargo - not counting the roughly 500 vendors and contingent staff on campus.

That means about 20 people were let go - in addition to the 40 to 50 cuts at the Fargo office in January.

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The cuts are part of 5,000 companywide job eliminations Microsoft Corp. announced in January, Gellos said.

The company also previously announced plans to cut facility costs, but Gellos said he does not believe Microsoft Fargo's 185,000-square-foot building and expansion project will be affected.

"The nature of the activity that's taking place today, especially as it relates to Fargo, is fairly small in the overall sense," Gellos said.

Still, it adds to the area's growing unemployment rate, which has doubled over the past four or five months, said Brian Walters, Greater Fargo Moorhead Economic Development Corp. president.

"It's all adding up to a situation where we're definitely in recession in our community," he said.

In a memo to all Microsoft employees, CEO Steve Ballmer announced the cuts and said the company is "mostly, but not all done with the planned 5,000 job eliminations by June 2010."

"This is difficult news to share," he wrote. "Because our success at Microsoft has always been the direct result of the talent, hard work, and commitment of our people, eliminating positions is hard."

The company is moving quickly to reach its target to reduce uncertainty for employees as soon as possible, he said. Microsoft will continue to closely monitor the impact of the economic downturn and take further actions - including more job cuts if necessary, he said.

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He also said Microsoft will provide support to terminated employees as it did during prior job cuts.

According to sources, between 40 and 50 Microsoft Fargo employees were laid off in January, part of the 1,400 companywide job cuts.

Microsoft Corp. said it would cut an additional 3,600 jobs companywide over 18 months because of deteriorating global economic conditions. Most cuts were expected at Microsoft's Redmond, Wash., facility, where the company is based.

The cuts are not expected to impact business relations between Microsoft and its partner companies, according to a Microsoft Partner in Fargo.

Microsoft promised Fargo officials in 2007 it would add 207 jobs paying more than $15 per hour. In return, the company was granted $6.13 million in property tax breaks for a $35 million expansion at its main campus.

In January, The Forum reported the layoffs could lead to Microsoft's property tax breaks being trimmed if the firm can't meet its hiring promises, according to City Assessor Ben Hushka and the North Dakota Century Code.

But exemptions in state law could let Microsoft and other businesses get their tax breaks without adding a single job.

In 2007, Fargo granted a five-year, 100 percent property tax exemption, worth about $817,000 a year, for Microsoft's expansion. The city also granted a second five years of exemptions worth $408,844 a year.

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Hushka said Microsoft has two years to meet its goal once its expansion is completed, but the company can ask for two one-year extensions.

Under state law, a firm failing to meet goals could be forced to pay back a prorated amount of its tax break. The law also allows local governments to cut job or pay goals if public benefits outweigh them.

In the short term, Walters said there's nothing the community can do to overcome global economic conditions. But long term, there are opportunities to diversify and grow the economy in sectors that are doing well, such as biotechnology and embedded systems, he said.

"These things take years to employ," he said. "Now we're at a time where there's going to be a little more sense of urgency, but it still takes years to put these strategies in place."

Readers can reach Forum reporter Tracy Frank at (701) 241-5526

Microsoft layoffs
Work continues Tuesday on the addition to the Microsoft campus to the west of the main office building in Fargo. Dave Wallis / The Forum

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