Rumor: Microsoft to lay off 17%

[jturning]

Wow, that's a lot of workers if it ends up being true. And on the heels of the Zune fiasco, this could be the beginning of the end. Morale tanks when you have massive layoffs. I know where I work, all the go-go hoorah garbage they were pushing disappeared, and the quality of the operation declines.

http://arstechnica.com/journals/microso ... roblogging

Rumor: Microsoft to lay off 17% of staff on January 15, 2009

By Emil Protalinski | Published: January 01, 2009 - 06:18AM CT

Last week, Mini-Microsoft reported on a rumor regarding Microsoft layoffs expected to start on January 15, 2009 (a week before Microsoft's Q2 earnings report). I brushed the news aside then, but now it's worth quoting, just in case:

Rumors. Microsoft layoff and cut-backs and Reduction In Force rumors. That's all I have for you. Rumors and second-hand speculation and the comments left by the fine, good-looking folks who participate in the conversation here. So pour yourself some holiday cheer and dive in.

Keep this information in mind when you consider that this week Fudzilla has also received information about cutbacks:

Currently Microsoft employs about 90,000 people across the world and from what we're hearing, some 15,000 of those are expected to be giving marching orders come January 15th. That's almost 17 percent of Microsoft's total work force, not exactly a small number. So far, we haven't managed to confirm what departments or regions will be hit the worst, but we're hearing that MSN might be carrying the brunt of the layoffs. We're also hearing rumors about the possibility of somewhat larger staff cuts at Microsoft EMEA (Europe, Middle East and Africa).

Both sites claim that Microsoft recently warned its employees of the upcoming date. Nevertheless, this is staying in the rumor box until Microsoft speaks to the public about it. The recession is being used as an excuse by many companies to do some cleaning, though Microsoft is not typically a company that has mass layoffs, given its high profit margin.

The last Microsoft rumor reported by Fudzilla turned out only somewhat true: the company did not launch retail stores, but they expanded the Microsoft Store to the US. I would not be surprised if there were layoffs coming on January 15, but I can't see them being as huge as 17 percent. What are your thoughts on the rumored layoffs?

Bugz

[Patrick]

I feel bad for anybody who gets layed off. In the same breath it's not that surprising. Everybody gets effected by a bad economy. The fact that its Microsoft just shows that they're no longer immune to anything. Welcome to 2009.

[jstgtpaid]

This recession could be very bad. The credit market is very tight. Even though the banks have been given a cash injection they are more concerned about their balance sheet than lending. A similar thing happened with the Japanese recession in '91. Anyway, since credit is tight, I think you will see a big focus on cash flow. A few ways to increase cash flow are not pay bills (yes some execs use this method), improve collections of funds due, and cut costs.

So I think that unless the lending situation and economy improves, companies will continue to shed costs. The easiest way to shed cost is to layoff folks...

[eddie]

I feel for them too, MS could have the saved themselves a lot of trouble and just let one person go several years back. The one person who allegedly openly admitted he did not know anything of what was going on at MS. And yet he was as it was told to me that the was the CEO? There should have been a mutiny right then and there to get rid of him. It is a shame how many people are going to pay for his mistakes. MS is a ship without a real captain.
of the 17%:
How many work in the IP area?
How many work in the Zune area?
How many work in the Vista are?
How many are just brown-nosers?
How many are linux advocates?

[Patrick]

So it's official:
http://www.bloomberg.com/apps/news?pid= ... =worldwide

5,000 layoffs. About 10% of their work force. Bummer.

[eddie]

I hope Ballmer is in that ten thousand. I bet Microsoft stock would shoot up to some degree immediately.