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More on Microsoft layoffs

by on02 January 2009


A lot of reasons why it will happen

Many news outlets covered out story about Microsoft planning to lay off as much as 17 percent of its workforce and there seems to be a lot of concerns about the number, as many people are saying it's too high.

Well, let's us try to explain a bit more details that has come to our attention since we wrote the initial piece. Parts of Microsoft are still doing well, such as the volume licensing department and as we mentioned in the previous story, the Xbox 360 division, however, some other areas of the company isn't doing as well.

We've been told that some division of Microsoft has cut their expected sales for 2009 by as much as 90 percent and this is a huge number. This in turn means that there's less work for the supporting departments and as such Microsoft has a lot of redundant staff.

Then take into consideration that Microsoft hires a lot of employees via agencies and that this number of employees aren't included in the total head count at Microsoft. There's a big chance that a large chunk of the 17 percent figure could come out of the agency staff. Being a full time employee (FTE) at Microsoft brings higher pay and more benefits than being hired as a contractor. There are also different types of contracts and some are likely to be more affected than others.

Microsoft is also spending a lot of money on various R&D projects and these aren't exactly making money, so we have a feeling that some of the more exotic projects might be put on ice for the future. We're also hearing that some staff might be given the chance to find another job within Microsoft, but will be given a deadline to do so and if they can't find a job within Microsoft before that deadline expires, then they'll be laid off under a slightly different terminology.

It's all going to be a matter of semantics, as although Microsoft might not announce the exact figure, there will be major cuts in a lot of departments, or at least changes which will lead to people having to leave Microsoft one way or another, it might just be a bit more subtle than issuing redundancies to 15,000 people all at once. We're sure that Microsoft will get its PR department to work on a nice spin on this story comes next week, so hopefully we'll be able to offer a company statement by then.

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Microsoft getting ready to lay off 17% of staff
Last modified on 02 January 2009
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