In its history, Microsoft has never had a major round of layoffs, but many analysts expect the
software giant to announce significant job cuts involving several thousand employees Thursday in its fiscal second-quarter earnings call.
Microsoft's Q2 results are expected to be a sad reflection of the nose-diving economy, and analysts cite weak sales in the 2008 retail season as a main cause. Microsoft's Q2 estimates are for earnings of 51 to 53 cents per share and revenue of $17.3 billion to $17.8 billion for the quarter, which ended Dec. 31.
"Checks indicate that Microsoft is likely to engage in head-count reductions to the tune of 6,000 to 8,000 employees or 6 percent to 8 percent of its 95,000 workforce," McAdams Wright Ragen analyst Sid Parakh told Reuters. "Our checks also revealed some speculation over the potential for a second round of cuts in some groups sometime later in the year."
Speculation over Microsoft layoffs flared in December when anonymous Microsoft blogger Mini-Microsoft said Microsoft layoffs could be coming on Jan. 15. However, not all Microsoft watchers are expecting mass layoffs.
Earlier this month, Microsoft blogger Mary Jo Foley suggested that instead of layoffs, Microsoft could look to cut costs by dismissing some of the hundreds of contractors the company works with, and/or by jettisoning non-performing projects, tightening travel policies and relying on attrition.
Solution providers contacted by Channelweb.com aren't expecting any layoffs to affect their dealings with Microsoft, although some sources said Microsoft has been reducing channel head count and cutting channel marketing budgets.
"I've seen them make a number of cuts -- my marketing budget from Microsoft has declined 80 percent this year," one source told Channelweb.com last month.
