Update - Microsoft Plans Cost Cuts, But Huge Layoffs Unlikely
Microsoft [MSFT 20.33 0.89 (+4.58%) ] will embark on a significant cost-cutting initiative in 2009, which might begin as early as this month, to offset a global slowdown in sales.
However, sources tell me the cuts will largely be handled through attrition and the non-renewal of contract employees, rather than through a rumored, sweeping layoff.
Rumors of a broad workforce reduction at the world's largest software maker have been swirling since a blog post last week purported to show that Microsoft was preparing to lay off as many as 15,000 employees, or 17 percent of its workforce.
A Microsoft source tells me that the speculation is "grossly exaggerated," but added that "any company not paying careful attention to headcount in a climate like this is nuts."