Layoffs At Microsoft Widely Expected To Be Announced This Week

A year ago this would have seemed impossible: layoffs at Microsoft. Until relatively recently Redmond was saying that it would be able to weather the recession without significant disruption. However cost cutting is now the order of the day and no one appears immune.

The layoff rumors first appeared in December and have steadily resurfaced. One of the early rumors was that as many as 15,000 jobs at Microsoft would be eliminated. However Reuters quotes financial analysts who assert the number will probably half or less than half that figure:

Microsoft Corp is expected to post a quarterly profit that misses its own target and announce thousands of job cuts this week as the global economic slump hurts even the technology industry’s biggest players . . .

“Checks indicate that Microsoft is likely to engage in headcount reductions to the tune of 6,000 to 8,000 employees or 6 percent to 8 percent of its 95,000 workforce,” said McAdams Wright Ragen analyst Sid Parakh. “Our checks also revealed some speculation over the potential for a second round of cuts in some groups sometime later in the year.”

Microsoft is set to announce its fiscal Q2 earnings on Thursday of this week. Many financial analysts believe the job cuts, if they happen, will be discussed, as the paragraph above indicates, on the earnings call. On the same day Google will report 2008 Q4 earnings.

Though no one is certain of exactly how many jobs will be cut at the world’s largest software company, one can be almost 100 percent certain that Microsoft will be asked about its meeting with Yahoo Board Chairman Roy Bostock and whether there’s any prospect of a revived bid for the latter’s search business.