Redmond (WA) – Rumors about substantial cutbacks at Microsoft have been circulating for at least two months, but have not been confirmed by credible sources. The rumors were reignited by Fudzilla, which claims that the axe will fall on January 15 and affect about 15,000 employees.
Such a cutback would translate into a 17% reduction Microsoft’s global workforce of 90,000 people. Fudzilla’s sources indicate that MSN will take the brunt of the layoffs and the company’s EMEA region will be hit harder than any other geography.
While January 15 has been the target date for potential layoffs for some time there is doubt whether the company will indeed announce cutbacks on this day, exactly one week before its quarterly earnings call, and whether Microsoft will really fire 15,000 of its employees – which would be the most significant layoff move in the firm’s history.
However, the Mini-Microsoft blog, which is usually a reliable source on inside-Microsoft topics, also posted a note that “substantial” layoffs are coming on January 15.
Job cuts are usually announced on the day of the earnings release. If Microsoft in fact announces layoffs one week before the earnings release, the company may be preparing Wall Street for bad news one week later.
In October, the company said that it expects sales of $17.3 billion to $17.8 billion during the Christmas quarter, as well as operating income of $6.1 billion to $6.4 billion. The company has not revised its guidance yet and is unlikely to do so in the coming two weeks. Last year, the company reported record CQ4 revenue of $16.37 billion and record operating income of $6.48 billion.
TG Daily’s own sources noted that Microsoft employees are “on edge”, waiting for news whether those rumors are true or not. The general sense is that the 15,000 estimate may be a bit high, but there seems to be no doubt that “thousands of jobs will disappear.”