Microsoft could announce layoffs

In what could prove to be a truly distressing sign of the increasingly troubling economic conditions, The Wall Street Journal (among many other sources) is reporting that Microsoft Corp. is “seriously considering significant work force reductions that could be announced as early as next week.”

Layoffs are an extremely rare occurrence at Microsoft, and details have not yet emerged regarding the number of potential cuts. The company could end up finding alternative cost-cutting measures, and may announce its plans as soon as next Thursday, when it reports its financial results for the holiday quarter.

In more than thirty years of business, large-scale reductions in force have basically been unheard of at Microsoft. Clearly, a major layoff would be worrisome, not just for the software giant but as a sign of just how deeply the economy has been wounded. While Microsoft has the deep pockets necessary to weather the recession storm, it doesn’t bode well for them that several other major technology companies, including Hewlett-Parckard Co., Yahoo Inc., Sun Microsystems Inc., and EMC Corp, have already announced layoffs (Stay up to date with Vault’s Layoff Tracker).

Layoffs at Microsoft – did you ever think you’d see that headline? We can only hope that CEO Steve Ballmer figures out a way to make good on his claim that major cuts are “Not our company culture,” and thus unlikely. What else should companies be doing to cut costs and avoid increasing our readership through layoffs?

--Posted by Steven Schiff, Vault News & Commentary