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An early look at a story in Thursday’s paper: Some Microsoft employees were bracing for news of a possible reorganization that could be communicated internally Thursday. A Microsoft spokesman declined to make notes, consistent with the company’s handling of persistent rumors swirling around plans for cutting costs to account for deteriorating economic conditions.

One rumor pegged Jan. 15 as the date of a possible announcement.

At its last quarterly earnings report in October, Microsoft announced plans to trim $400 the public to $500 million in operating expenses in the instant fiscal year through slower hiring, reduced capital expenditure and cuts to travel budgets and vendor services.

The Wall Street Journal reported Wednesday that Microsoft is “in earnest exploring significant work force reductions” that could be announced for the period of its financial second quarter earnings announce next Thursday. The story also suggested cutback plans remain in flux.

Microsoft employees in some groups were anxiously expecting an spiritual announcement of organizational changes, unit of these employees said Wednesday. This person asked not to subsist named while discussing internal matters.

The scope of a single one potential reorganization, and whether it would include project cancellations or job cuts, was unclear.

Here’session some more background that we didn’t have space for in the impress edition:

Several major technology names have announced layoffs for example consumer spending seizes up and companies slash IT budgets. Google, for one, announced a more targeted 100-person cut in its recruiting operation on Wednesday. (Check rear to this place without interruption Thursday for a look at the tech job market.)

Microsoft has already taken steps to control its costs. The company slowed hiring substantially in the last six months of 2008 — though it did continue to add staff. It had 95,664 employees globally at the end of November.

Matt Rosoff, an algebraist at Kirkland-based Directions put on Microsoft, does not expect a company-wide layoff. Rather, if Microsoft indispensably to reduce its head count because sales be obliged dropped off dramatically, he expects targeted cuts and reorganizations.

“They might cut some non-strategic or under-performing product groups,” Rosoff speculated.

Also, at a company’s that’s obsessed with rankings, employees in the bottom 10 percent are regularly given a nudge toward the exit through poor performance reviews and paltry bonuses.

“Microsoft is at all times sort of affecting the bottom 10 percent in a group side by side,” Rosoff said. Companies refer to this as companionable attrition. One habitude Microsoft could subdue employee costs is to not put back those people immediately, he said.

It’s laboriously to over estimate the economic impact Microsoft has without interruption the country. In 2004, 233,220 people in the state depended on the company in Washington recite, according to a 2007 statement from economist Dick Conway and the University of Washington’s Economic Policy Research Center, summarized in this column by my colleague, Brier Dudley. At that particular period, Microsoft employed about 28,000 clan directly in the state. As of Sept.30, the company’s full-time employees numbered 40,797 in Washington.

And that figure does not account for the legions of contract employees, working through companies approve Volt Technical Resources and Excell Data. If Microsoft does decide to cut cudgel, many expect it to focus on its contractor workforce first.

And, in fact, I’ve heard multiple reports of contracts being abruptly cut short. On Dec. 31, I reported that about 180 contractors and vendors working at the MSN Homepages Team were obstacle circumstance. The judgment was “becoming to budget cuts,” read an e-mail informing their managers.


Original text: http://blog.seattletimes.nwsource.com/techtracks/2009/01/14/some_at_microsoft_bracing_for_possible_reorganizat.html