Microsoft Rumored to Lay Off Thousands Worldwide

It seems not even Microsoft is impervious to the effects of this increasingly painful recession. According to reports, the Redmond-based company is preparing to lay off about 17 per cent of its entire workforce in the coming months.

Despite its portfolio diversity -- including operating systems, antivirus software, and video game consoles -- Microsoft is clearly feeling the pressure applied by a tightening global economy. In fact, there seems to be a sense of emergency to the massive cuts (about 15,000 workers out of 90,000), which rumors suggest should be made official by January 15.

As expected, the cuts should be heaviest in those sectors deemed least profitable. Early speculation is that the MSN search division will be the first to feel the burn, given its recent difficulties.

However, some insiders wonder if Microsoft is really in as much trouble as people believe. CNET industry reporter Henry Blodget recently stated that unless Microsoft's profits have been nearly eliminated in recent months, "there is no reason for the company to suddenly cut this much cost. Microsoft's margins are still fine, and much of its revenue is generated from multi-year contracts." (Source: dailytech.com)

So, what will Microsoft do?

According to Blodget, it's more likely that the company will attempt a restructuring scheme rather than shut down divisions altogether. "The only way we could see Microsoft laying off this many people is if the company decided to eliminate business units. And if Microsoft did decide to restructure its business, it would likely sell rather than shut down divisions, including MSN," Blodget remarked.

The news is shocking evidence that the tech industry, and its strongest corporation, are vulnerable to a declining global economy.

It should be noted that Microsoft has refused to comment on the layoff rumors (which at this time are in fact still rumors). However, a number of blog sites and industry insiders, including Fudzilla and Mini-Microsoft, have speculated for some time that cuts would be necessary.

If the whispers are to be believed, the heaviest job cuts will come first to the Middle East, Africa, and Europe. (Source: itproportal.com)