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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

December 31, 2008 at 4:41 PM

More speculation on Microsoft layoffs, contractor cuts

A few people have asked me about a story on an obscure tech news site, Fudzilla, that purports to confirm as fact the rumors of a major Microsoft layoff coming next month. I’ll say that I am skeptical of the story because: the author does not mention a single source for the information, anonymous or otherwise; I’ve not seen the site break news of this magnitude before (doesn’t mean it hasn’t happened); the name Fudzilla makes me think of fear, uncertainty and doubt.

Still, there is a lot of chatter going on about cost cuts at Microsoft and whether they will include layoffs or layoffs disguised as something else. Microsoft is making no official comment on any of this — as is its practice — and I doubt they will until they’re ready to make a formal announcement.

I can report that I’ve heard from a handful of contractors whose contracts at Microsoft were abruptly cut short.

These people have all asked not to be named, for fear of jeopardizing their chances for future employment with Microsoft and the vendors that provide the company with contract workers.

One man provided an e-mail from earlier in December in which managers at the MSN Homepages Team were informed that all of their contract personnel were being terminated today. The decision is “due to budget cuts,” the e-mail reads.

My source said this single cut impacted about 180 contractors and vendors.

This is only one team within a huge company, so I hesitate to extrapolate the MSN Homepages experience to other parts of Microsoft. But clearly, the company is looking for places to trim and contractors — by their nature temporary — are easier to let go than full-timers. This is no surprise as Microsoft said at its last quarterly conference call that it would make every effort to trim costs in light of the global economic downturn.

Meanwhile, the discussion at Mini-Microsoft, which first floated the idea of a major cut coming Jan. 15, turned more skeptical this week. Mini elevated a series of comments suggesting there will not be layoffs in January. Other comments suggest a major corporate reorganization that will ultimately cut or consolidate some groups and projects. Mini himself seems to have changed his tune:

“So do I think anything is going to happen January 15th? Well, it is after CES (we certainly don’t want any bad news before that – though look carefully at the groups there and not there) and before quarterly results (no bad surprises delivered with results – check). But after the rather alarming attention the previous rumor-driven post got, even if something was going to happen January 15th I’d completely expect that’s off the table now. Sorry, Oppenheimer & Co.”

Comments | More in Coming and going, Tech Economy


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