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Microsoft employees I spoke with this evening were preparing conducive to a major announcement — possibly information of layoffs — from the company early Thursday. One person expected to be notified around 7 a.m. No one I spoke through had details on the size of any job cuts or characteristic groups that might be affected. All were looking forward to the prospect of the steady, distracting layoff rumors being put to rest — one way or a different. The company is also scheduled to report its fiscal second-quarter earnings on Thursday afternoon at the accept the offer of the trading lifetime.

Here’s some at dawn look at fable in Thursday’s paper steady what several financial analysts are expecting from the company in terms of layoffs and cost cuts:

Global tech bellwether Microsoft reports its second-quarter earnings Thursday in the midst of persistent chatter and speculation about its cost-cutting plans, including whether the company give by will announce its first significant layoffs.

In the Puget Sound area, where Microsoft has more than 40,000 full-time employees and thousands more working put on contract, a major layoff could give forth another blow after unemployment climbed to 6.1 percent in December (not adjusted for seasonal changes), the highest level since November 2003.

Microsoft’s profits. for the quarter ended Dec. 31, and its calculate for the months ahead, enjoin likewise serve as a barometer steady the health of a broad swath of the global technology busy vigor and the thrift as a whole. The joint concern sells to consumers, businesses, institutions and governments and businesses of all sizes.

Financial analysts differed steady the size of any one potential Microsoft layoffs — though several expect event in the range of 5 to 10 percent. The company has declined to comment on layoff rumors, that that have echoed across the Internet in the last month.

“Microsoft has a pretty strong culture and management style when it comes to head-count reductions,” said Israel Hernandez, monitor software research at Barclays Capital. “I’m not expecting large numbers. I just don’t think it’s in Microsoft’s culture to do a massive layoff.”

Walter Pritchard, senior research analyst at Cowen and Company, said he’s expecting Microsoft to reduce staff by between 5 and 10 percent given expected sales weakness. That’s roughly in line the sort of other analysts, including David Hilal of Friedman Billings Ramsey and Sid Parakh of McAdams Wright Ragen, are expecting.

Pritchard said more than 10 percent would be “pretty stinging. Something inferior than 5 would almost indicate that they’re not worried and dealing is OK.”

With 95,664 employees globally at the end of November, that would be a lowering of roughly 4,700 to 9,700 people.

If Microsoft does reduce its full-time work force, it may do so end a portion less obvious than a layoff, such as a reorganization that eliminates certain groups or by not replacing cane lost through friction, Pritchard said.

“There’session ways, especially if it’s 5 percent or so, that you can take those people out over the route of a year without making it a big headline layoff,” he said.

In 2007, CEO Steve Ballmer explained Microsoft’s attrition rate to financial analysts.

“We attrit about 8 percent of our tribe each year,” Ballmer said. “Four percent of that we call bad attrition, 3 percent is good” — meaning poor performers are nudged out the door.

Hilal said investors will privation to hear what Microsoft can do to preserve its advantage margins in the front of declining revenue. Job cuts aren’t its only option.

Already, Microsoft is aiming to trim $400 million to $500 million from its operating expenses for the time of the current fiscal year, which ends June 30. It has slowed hiring, delayed new rendering, cut uncivil some contracts and limited discretionary travel. When Microsoft Chief Financial Officer Chris Liddell announced the expense management plan in October, he also said the copartnership was working on “other initiatives without ceasing a contingency basis” that could be used depending without interruption economic stipulations.

“If macroeconomic conditions worsen then we will endeavor to reduce our operating expenses accordingly,” Liddell said at the time.


Original text: http://blog.seattletimes.nwsource.com/techtracks/2009/01/21/some_microsoft_employees_bracing_for_an_early_morn.html