The world’s top software firm Microsoft has been asked to cut its workforce by 10%, or about 9,100 employees, to tell the market that profits are more important than revenue growth in difficult times.
Brokerage firm Oppenheimer and Co’s analyst Brad Reback has said in a report on Microsoft that such layoff exercise “would be a healthy move for the company.”
The move would be well received by the market and would “signal that profitability is more important than revenue growth during this very difficult time,” Reback added.
Calling for a 10% reduction on the company’s payrolls, Reback said in his report for the institutional investors of Microsoft, this would result in an approximately 10% gain in its earnings per share.
The software giant had close to 91,000 employees on its payrolls at the end of July-September quarter.
Earlier in October, Microsoft had put in place a hiring freeze on some of its divisions, such as entertainment and devices businesses that make products like X-Box and Zune.
There have been some unconfirmed reports on blogs that the company would announce some major layoffs in the first month of 2009.
Microsoft is scheduled to release its second-quarter results for the fiscal year 2008-09 on January 22.
Battling the economic crisis, companies in their bid to save costs, have announced more than one lakh job cuts in December alone in the US, while so far in 2008 there have been close to 20 lakh layoffs.
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