Report: Microsoft considers major job cuts

Analyst disagrees, thinks the company will accelerate its ongoing layoffs.

Microsoft may start a "significant" round of layoffs as early as next week, according to a report in the Wall Street Journal Thursday.

Citing unnamed sources it claimed were familiar with Microsoft's plans, the newspaper said the company is considering "significant work force reductions" across multiple divisions, but did not specify the number of workers who would be affected.

And the Journal hedged its bets somewhat. "Plans for the cutbacks are still in flux and Microsoft could end up finding alternative methods of reining in costs," the paper reported.

If Microsoft does announce layoffs, it would join other big-name technology companies that have recently scaled back employee head-counts, including Google and Oracle. The former said today that it is laying off 100 recruiters and closing engineering offices in Texas, Norway and Sweden, while the latter reportedly made "major" cuts in its workforce last week , with more in the offing.

Rumors of possible layoffs at Microsoft have been circulating for weeks, with the number 15,000 most often cited as a target for any reduction.

Rob Helm, an analyst with Directions on Microsoft, a research company that focuses on the Redmond developer, doesn't think large cuts are likely. "I don't think we'll see any major layoffs next week," said Helm, referring to the run-up to Thursday, when Microsoft is scheduled to reveal its earnings for the past quarter. "The company always has a rolling layoff and that may accelerate."

Microsoft tends to regularly reorganize its operational divisions and working teams, Helm continued, with the idea that the lowest-rated workers in the company's review system are then shoved out the door. "When the company reorganizes, some people don't have chairs when the music stops," said Helm. "We may see some more of that activity."

Historically, Microsoft has steered well clear of massive layoffs. In Helm's memory, for instance, the largest was a drop of some 600 employees in the Microsoft TV group during the dot.com bust early in the century. "But that was more about scaling back and refocusing," Helm argued, not layoffs for their own sake.

That's not to say Microsoft doesn't face the same pressure that's been driving other major technology companies to shed jobs. "The reality is that Microsoft has to protect its margins, and some of the highest-margin customers, like those in the financial sector, are really hurting. [Microsoft] has to keep costs under control, too," Helm said.

How the company handles any cutbacks is the question, said Helm. His take: "I expect that next week [during the earnings call] Microsoft will announce what it's already doing to keep costs under control, and ... that will be to manage out people, cut some small business units and clear out the dead wood."

Microsoft declined to comment on the Wall Street Journal report. "Microsoft does not comment on rumors or speculation," a spokeswoman said today in an e-mail reply to questions.

Join the PC World newsletter!

Error: Please check your email address.

Tags Microsofteconomic downturn

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Gregg Keizer

Computerworld (US)
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?