Microsoft Planning Layoffs?

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The New Year is barely a day old, and already the technology rumor mill is in full swing. In addition to the obligatory speculation about what Apple might unveil at Macworld, software giant Microsoft is also at the center of a maelstrom of controversy amid so-far unsubstantiated reports the company plans to announce its first-ever layoffs a week before it issues its second quarter earnings report on January 22.

Although low-level speculation about Microsoft layoffs has been circulating for some time, the current run has apparently been sparked by Fudzilla, which reports that January 15th layoffs at the Redmond software giant are "no longer rumor but a fact," and claims Microsoft employees have been told major layoffs are on the way. Fudzilla claims Microsoft is looking to eliminate 15,000 positions.

Fudzilla has offered no substantiation for its report. The unofficial blog Mini-Microsoft has also reported on rumors of layoffs, but clearly identifies them as rumors and second- and third-hand murmuring.

When contacted about the story, a Microsoft spokesperson would only say the company does not comment on rumors and speculation.

Microsoft currently employs over 90,000 people worldwide. Although Microsoft has never undergone a round of formal layoffs, it has in the past eliminated or reduced operations within the company and given employees deadlines to find new position in-house or leave the firm.

Industry watchers speculate that if layoffs were to hit the company, units like MSN might be trimmed back, as the company revises its online efforts to focus more sharply on online advertising and integrated Windows Live services. Online services is also getting a new president, former Yahoo executive Qi Lu, beginning January 5. Other possible targets for layoffs might include overseas sales and marketing operations, although most pundits expect Microsoft’s operating systems, servers, entertainment, and Office applications groups would remain largely untouched.

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