Rumour-mongers have marked January 15 as the day Microsoft could carve up to 17 percent from its workforce, but US financial analysts are doubtful the software giant is in any financial trouble.
The latest to report on the possibility of layoffs at the software giant is the blog Fudzilla, which puts the number of job cuts at 15,000, or nearly 17 percent of Microsoft's worldwide operations. The January 15 date is a week before Microsoft's second-quarter earnings report, scheduled for January 22.
Microsoft has planned a briefing for financial analysts for January 8 at the Consumer Electronics Show in Las Vegas, with the headliner listed as Robbie Bach, president of the entertainment and devices division.
The rumoured layoff numbers have expanded on previous predictions which suggested that 10 percent of the company's employees could lose their jobs.
Fudzilla predicted staff from Microsoft's consumer entertainment portal unit MSN — which in Australia operates as a joint venture with PBL's Chanel 9 — would be the hardest hit by layoffs. ZDNet.com.au's US sister site CNET News.com had not confirmed what departments or regions would be hit the worst or whether rumours of larger staff cuts affecting Microsoft's EMEA (Europe, Middle East and Africa) operations had any substance.
Wall Street veteran Henry Blodget said the target areas mentioned by Fudzilla made sense, but that the job cuts did not:
"Unless Microsoft's business has been absolutely crushed in the past two 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 (and is therefore unlikely to see a massive intra-quarter hit). In October, word leaked out of Microsoft that it would be closing its MSN Groups service on February 21, to be replaced with Windows Live Groups," he said.
Blodget saw potential for a restructuring in Redmond that would fit into the long-running, on-again-off-again Microhoo saga:
"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 (If Microsoft wants to get out of the consumer Internet business, which it should, the best way to do it is to spin its online operations into Yahoo in exchange for a big piece of the company.)"
Why is ZDNet/CNET reporting on rumours?
Isn't it the job of journalists to substantiate rumours?