Microsoft expected to announce layoffs

The Wall Street Journal is the latest to report the company is considering job cuts, a rare move at the software giant.

In past downturns, Microsoft has been able to trim around the edges and avoid large, widespread layoffs. But, as Steve Ballmer made clear in an interview with me last week, this is no ordinary downturn.

"The fact of the matter is, this is not a downturn, this is a bit of a reset," he said. "Those are quite different and we're trying to really suss through what we think that means for us."

For some weeks now, the company has been considering whether it would need to cut a significant number of jobs, with some analysts predicting layoffs of anywhere from 10 percent to 17 percent of Microsoft's 95,000 employee workforce, though I am hearing the number could be significantly less than those figures.

The Wall Street Journal reported on Wednesday that cuts could come as early as next week; the company is scheduled to deliver its earnings report on Thursday.

Microsoft has cut jobs in a particular area or product group in the past, even in the hundreds of jobs, although it has never had companywide cuts in the scale currently being contemplated.

A Microsoft representative declined comment.

In our interview and others last week, Ballmer didn't specifically guarantee layoffs, but that seemed the logical inference.

"Revenue will be lower in aggregate in our industry than it would have been, and that will (affect) Microsoft, Cisco--you name the company--Intel," he said. "We'll all be affected by that."

I have spoken with a number of other Microsoft executives in the past week, all of whom have talked about adjusting their plans to deal with the downturn, though none would comment specifically on layoffs.

The company has already been cutting costs in other areas, including vendors and contractors . It has also significantly slowed hiring , though it has stopped short of an all-out freeze.

Meanwhile, Google said Wednesday that it is cutting 100 recruiters from its payroll as the company significantly slows its once torrid hiring pace.

 

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