Microsoft layoff rumors swirl

Xbox 360 purveyor said to be reducing workforce significantly as early as this month; initial estimates of 15,000 layoffs labeled "grossly exaggerated."

This week, Microsoft has trumpeted a number of wins for the Xbox 360, which currently has a firm hold on second place in the current-generation console sales race. Calling 2008 the "biggest year ever for Xbox," Microsoft said its high-definition gaming console reached the 28-million milestone in units sold globally through the end of 2008, outpaced Sony's PlayStation 3 in the European, Middle East, and Africa regions by a cool 1 million units, and logged its 17 millionth Xbox Live subscriber, generating $1 billion in digital distribution sales in the process.

Still, it appears the Washington-based software company has plans to match rival Sony stride for stride in an effort to trim costs in the face of the ongoing global economic downturn. CNBC reports today that as early as this month, Microsoft will begin reducing its workforce. According to CNBC's sources, the downscaling will primarily come by way of the elimination of positions vacated by those already leaving the company as well as a reduction in contract employees.

In late December, tech blog Fudzilla reported that Microsoft planned to trim its staff by as much as 17 percent in the New Year, or about 15,000 employees. However, a Microsoft source told CNBC that the blog's initial report was "grossly exaggerated" but added a caveat that "any company not paying careful attention to headcount in a climate like this is nuts."

CNBC's report named no specific business groups that Microsoft may be targeting with the cutbacks. It did, however, mention a recent report in the Seattle Times claiming that Microsoft eliminated about 180 positions related to its declining Internet browser business, which saw its market share drop from 74 percent in May 2008 to 68 percent in December.

Microsoft will hold its annual Consumer Electronics Show press conference the morning of Thursday, January 8. GameSpot will be on the scene in Las Vegas to provide coverage of the briefing as well as the rest of the show.

86 Comments

  • Zoldaire

    Posted Jan 11, 2009 11:13 pm PT

    Oh my. That's a lot of people. Hopefully the economy will take a turn or a lot more people will my unemployed.

  • sammoth

    Posted Jan 9, 2009 5:34 pm PT

    DAKYON

    Your an idiot he bought it and remarketed DOS. That is not stealing that is buisness. Get over it.

  • DAKYON

    Posted Jan 9, 2009 10:13 am PT

    @okassar
    do you thing stealing other peoples idea is EPIC ? that's what bill gates did and thats how M$ exist

  • DAKYON

    Posted Jan 9, 2009 10:08 am PT

    "grossly exaggerated" ......................................... that enough to prove that M$ sucks

  • beekayjay

    Posted Jan 9, 2009 2:26 am PT

    15 000 employees sounds excessive but keep in mind that Microsoft is more than just "the maker of the 360". Its very possible that layoffs will occur to every division under the MS banner, and with a company as huge as MS, 15000 becomes somewhat plausible. It has no reflection on the performance or success of the company in the last year, but it may be a cost saving measure to prepare for the coming depression.

    Let's just hope they don't take their guns away, cuz then it'll be even worse, eh, 40Jared40??

  • 40Jared40

    Posted Jan 8, 2009 5:53 pm PT

    This economic downturn isnt coming to a end anytime soon especially since Obama is in office. He wants to take our guns away and his way to turn around the economy is even making his own party question him.

  • xshadow_raiderx posted Jan 8, 2009 5:40 pm PT (does not meet display criteria. login to show)

    xshadow_raiderx

    Posted Jan 8, 2009 5:40 pm PT (hide)

    M$ should go out of business and sony and apple should take over

  • okassar

    Posted Jan 8, 2009 5:23 pm PT

    I'm sure Windows 7 will get them above where they are now.I don't think MS will EVER fail,it's such an EPIC company,you just can't argue with that(at least,not effectively...) x)

  • RavageGT

    Posted Jan 8, 2009 4:54 pm PT

    As a Xbox fan I am glad Microsoft is taking damage because it will force them to get their game up and compete with PS3, which means more awesomeness for both sides.

  • gbrading Site moderator

    Posted Jan 8, 2009 4:30 pm PT

    Of course, in industry terms, "grossly exaggerated" means that they're actually laying off 14,000 staff. The crunch is hitting everyone badly.

  • majidok

    Posted Jan 8, 2009 4:02 am PT

    Oh wow

  • Mac11_Fanboy

    Posted Jan 7, 2009 5:37 pm PT

    I saw a video on BBC news of this matey trying to demo the multi-touch in windows 7. It tool him about 3 attempts to open an explorer window. State of the art biatch!

    Mac OS X ForTheWintimes

  • ronnet

    Posted Jan 7, 2009 12:57 pm PT

    Windows 7 will be highly compatible with Windows Vista. Microsoft isn't releasing Windows 7 because Vista sucks but because Vista has a bad reputation. Which is really their own fault because they released it too soon. I got Vista SP1 on my new laptop and it's great. Ofcourse there isn't anything that makes me think they ahd to replace XP already but it isn't as bad as people make it out to be. Certainly an improvement over XP plus I like my moving waterfall on the background, it's relaxing.

  • Gamer_4_Fun

    Posted Jan 7, 2009 12:49 pm PT

    These hard times times for everyone....

  • joevitale1

    Posted Jan 7, 2009 12:38 pm PT

    @bukejit. The next OS from MS is windows 7. windows vista sucks, thats what I think and I cant use most of my software with it. I use my computer more for Video things and as a music studio. Vista sucks so bad that MS is going to keep selling XP for for the people who buy Dell, gateway and so on. win 7 was not even going to come out for another 4-5 years and now they are doing everythin gthey can to have it out by jan 2010.

  • Myzz617

    Posted Jan 7, 2009 12:16 pm PT

    so all you "fanboys" Can shut it with the sony hating and PS ending. EVERYONE needs to re-orgainze their business in order to keep going during these times.

  • siefier25

    Posted Jan 7, 2009 12:16 pm PT

    If its true, this is bad news all around. A money making machine giant like Microsoft taking a hit like that...

  • Makaatsu

    Posted Jan 7, 2009 12:11 pm PT

    Fudzilla....nobody remember when they predicted The Wii would never sell and would do worse then the Gamecube?? You dont need to be a genius to work out the 8th biggest profit making company in the world will not be sacking 17% of their staff. Who was their source then some guy who works in the chip shop? Besides 180 people being fired, is that even newsworthy?

  • bukejit

    Posted Jan 7, 2009 11:52 am PT

    I doubt that anything to do with the xbox will be touched here. there wouldn't be THAT many working with the actual console itself (excuding call centres and factories, which are probably not owned by MS) and game development teams tend to be quite small anyway.

    To anyone saying this is because of vista, My electronics teacher is a former employee of MS with alot of friends still on the inside. He says Vista is just a intermediatory OS between XP and what he says will be Windows 9 or Windows 10, because he can't remember which one. So think of Vista like a kind of Treyarch Call of Duty between 2 Infinity Ward ones. Not alot changed, but maybe a bit of an aesthetic overhaul. So not that much money has really been invested in vista anyway.

  • Mackey18

    Posted Jan 7, 2009 11:18 am PT

    @wallywallas
    i totally agree with that statement, it's not funny because people are losing their jobs and you hate the company they work for, they have lost their job and lets hope they all can find new ones.

  • hollow96

    Posted Jan 7, 2009 10:55 am PT

    careful attention to headcount? man thats cold

  • wallywallas

    Posted Jan 7, 2009 10:38 am PT

    Hopefully MS fanboys will stop laughing at the misfortune of Sony employees losing their jobs.

    The recession has hurt everyone, almost no company is safe.

    Let's just pray for these people so they can find a good job so they can lift themselves from these tough economic times.

  • necronaux

    Posted Jan 7, 2009 9:43 am PT

    Even with record sales, in this economy, businesses have to downsize to keep competitive. If they can do the same job, with less people -- Good them. Bad for (us) workers.

  • King_Jeremy_77

    Posted Jan 7, 2009 9:04 am PT

    "Let's set the facts straight: the Entertainment and Devices Division (which includes ALL gaming, not just X-Box, as well as Zune and other products) raked in an operating revenue of $8.1 billion. Sounds impressive until you realize that Microsoft's total operating revenue for FY08 was $60.4 billion! The Windows and Servers & Divisions rake in far, FAR more money for MS than X-Box. Try visiting the investor relations page next time - it will save you from looking like an idiot. As for the larger MS picture, both my wife and I have worked at MS in various departments include the game studios. MS is a bloated company. There are way more employees than necessary, especially in mid to upper management positions. No company needs that many directors and VPs. The level of staff redundancy is simply insane. This is true of all functions ranging from marketing to engineering. I hate to see a lot of good people lose their jobs but this is long overdue.

    Also keep in mind that when they talk about employees they are not including the tens of thousands of v- and a- contract employees who work at Microsoft just in the Seattle-Redmond area but are technically employed by Kelly, Manpower, Volt, Filter Talent, etc, etc. These employees can be cut at any time and for any reason and Microsoft doesn't have to report this to their investors or the media. "

    Well, that was...interesting. I'm sure Gamers really needed to know all that.

  • SpikedStrider

    Posted Jan 7, 2009 8:32 am PT

    This only makes sense, M$ needs to do cutback to save money. It does not mention doing any slashing the Xbox side, but you know how cuts go. Usually across the board. I don't see them cutting of the hand that feeds though.

  • LosDaddie

    Posted Jan 7, 2009 8:06 am PT

    This is expected

  • cyclocrosser

    Posted Jan 7, 2009 7:16 am PT

    LastPRmarine wrote:
    "MS is laying off people but mostly outside of the US and none or few people will be laid off from the Xbox division though I don't see it happening since that is MS's biggest money-maker"

    This comment demonstrates 2 things:
    1) You don't know how to read a financial statement
    2) You're utterly clueless about Microsoft's core business

    Let's set the facts straight: the Entertainment and Devices Division (which includes ALL gaming, not just X-Box, as well as Zune and other products) raked in an operating revenue of $8.1 billion. Sounds impressive until you realize that Microsoft's total operating revenue for FY08 was $60.4 billion! The Windows and Servers & Divisions rake in far, FAR more money for MS than X-Box. Try visiting the investor relations page next time - it will save you from looking like an idiot. As for the larger MS picture, both my wife and I have worked at MS in various departments include the game studios. MS is a bloated company. There are way more employees than necessary, especially in mid to upper management positions. No company needs that many directors and VPs. The level of staff redundancy is simply insane. This is true of all functions ranging from marketing to engineering. I hate to see a lot of good people lose their jobs but this is long overdue.

    Also keep in mind that when they talk about employees they are not including the tens of thousands of v- and a- contract employees who work at Microsoft just in the Seattle-Redmond area but are technically employed by Kelly, Manpower, Volt, Filter Talent, etc, etc. These employees can be cut at any time and for any reason and Microsoft doesn't have to report this to their investors or the media.

  • makemeweak

    Posted Jan 7, 2009 7:10 am PT

    I imagine they follow suit with Sony in laying off some employees in unprofitable divisions, but I bet that their video game divisions are largely untouched.

  • frmld posted Jan 7, 2009 5:42 am PT (does not meet display criteria. login to show)

    frmld

    Posted Jan 7, 2009 5:42 am PT (hide)

    what was that, Microsoft is getting rid off 15000 employees. wasn't it a while ago that when sony said it was letting jobs go and then all the xbox fans ran towards the forum crying out Sony sucks, Sony was overconfident, Sony this Sony that. well oh my how the tables have turned. don't get me wrong though, i do feel sorry for the people losing their jobs. all this time i was saying to myself 'maybe they are right and Sony cant compete against Microsoft' but oh no, Microsoft is doing just as bad, job loses, RROD for the xbox and that fact that vista was a complete failure.it seems that technical problems surround Microsoft. with the RROD,the hackers on live,the tech problems with gears 2, and vistas tech problems as well, i have come to think that Microsoft has all this money, and they still cant fix tech problems. HA. this is why the ps3 is worth it, why its so expensive, because it doesnt break down!

  • Teka522001

    Posted Jan 7, 2009 4:29 am PT

    lol at that slqmaster guy. He cracks me up, what a moron. High definition isnt based on the disc idiot, its the thing that it holds, HD movies are huge so you cant fit them on a DVD but xbox 360 games with "HD" graphics can. Go suck a pickle fanboy.

  • waheeb2020 posted Jan 7, 2009 4:18 am PT (does not meet display criteria. login to show)

    waheeb2020

    Posted Jan 7, 2009 4:18 am PT (hide)

    i wander if have do whit RROD

  • msudude211

    Posted Jan 7, 2009 3:24 am PT

    Everyone is laying off...

  • gamer082009

    Posted Jan 7, 2009 3:04 am PT

    Well, what can you say. It's almost shocking that Microsoft would need to cut workers, but in this unprecedented economic time anythings possible. Hopefully Microsoft can get through this rough time, which they will...lol and keep us PC and 360 enthusiast satisfied!

  • kavadias1981

    Posted Jan 7, 2009 1:31 am PT

    As much as I despise Microsoft for having a monopoly on the PC industry, they do employ a crazy amount of people so I hope they work it out.

  • datniccah187

    Posted Jan 7, 2009 1:15 am PT

    Eh stupid economy it shouldn't be this complicated, i don't get it.

  • snakes3425

    Posted Jan 7, 2009 12:44 am PT

    Right now it's all rumors, and let's just hope it's rumors, I don't think we can afford to put more people out of work, not with the economy in the shape it's in.

  • enjoyoutdoors

    Posted Jan 7, 2009 12:29 am PT

    Ah yes, Will this be another "layoff" fiasco like the one Intel had in 2001-2002, where they were actually growing by importing labor while claiming to be reducing and laying off Americans?

  • guyvue

    Posted Jan 6, 2009 11:31 pm PT

    SO4 = Star Ocean 4 or Star Ocean: The Last Hope will come out in 2009
    FFV13 = Final Fantasy Versus 13, will come out in the next year or so.

  • guyvue

    Posted Jan 6, 2009 11:28 pm PT

    last 2 posts, u 2 are just some dumb fanboy of each side.
    Xbox 360 isn't the only thing Microsoft do, they have many things sold around the world as well as Sony, not only they did PS3, both have computers, radios, etc, selling around the world and u 2 bias and talk about X360 and PS3, just 2 idiots that think of consoles war. X360 has already come out a year earlier than PS3 so it will sell more than PS3, PS3 came a year later and it already sold more than 20m units and X360 only sold 28m units releasing a year earlier.
    and about the selling, who care, just stop being a fanboy and go buy all the system or was it because u're too poor to afford the other system be a fanboy on another and hate the other.
    i was't that rich, i consider myself to be poor, but i can still afford all the new gen consoles, bought X360 for 3 gmes i really like, ToV, NG2, IU, SO4, and a PS3 for NGS, MGS4, FFV13, and bought the Wii for my teenage sister for her birthday.
    if i like a game that come on which system, i just go buy that system to play the game i like.
    like i said, i was poor, i made less than $12,000 a year, but i can still afford all the systems, and how rich are u and why u can't even afford the other system and be a fanboy to the console u only have?

  • Turkeysoup1

    Posted Jan 6, 2009 11:06 pm PT

    Apparently you know nothing about High Definition slqmaster and are clearly just a Sony supporter who will knock the 360 anyway they can think of. I use to like Sony until I saw how arrogant they were and how most of their loyalists, who do nothing but attack other consoles, became just as arrogant. You still forget one thing, the Wii is still demolishing your precious PS3 in sales and the 360 is still ahead of the PS3. It's almost like you came in 3rd in the 100 meter dash. Then complained that the 1st place finisher had drab clothing and that the 2nd place finisher didn't have the same shoes as you. Fact is, you're still 3rd place. Deal with it.

  • slqmaster posted Jan 6, 2009 10:38 pm PT (does not meet display criteria. login to show)

    slqmaster

    Posted Jan 6, 2009 10:38 pm PT (hide)

    HD gaming console, umm didn't the HD drive only play Movies. then HD DVD went under right. All MS games are on a DVD, so how is Xbox their HD gaming console. Upconvertor DVD players are considered Hi def so how come MS consider upconverting their games into 720p and 1080p as HD. dum dum dum

  • Gifted_One

    Posted Jan 6, 2009 9:43 pm PT

    @NullVision

    LOL.. I can think of a few... Oil Companies. United Arab Emirates are like all rich ppl... lol.. and is it fact of 40 billion? I thought it was closer to like 96 billion. Not sure.

  • Gifted_One

    Posted Jan 6, 2009 9:39 pm PT

    @HappyBB

    It would be a shame for a company so successful to go out of business because they think they are above an economic issue. If you ask me, Bill Gates and many others are well aware and capable as to what to do. Put it this way. If I sell less. Can I continue to run business as usual? or do I want to make a cut to make the overall company continue an upward trim. Or at least keep a deficit to a minimum. In my opinion, it's common sense to make the necessary adjustments to continue to thrive.

  • ColdfireTrilogy

    Posted Jan 6, 2009 9:34 pm PT

    HappyBB monetary values of the Dollar along with many other nations have led to a large depletion in once strong currencies ... even if they are making the "same amount" its still worth less than it was last year or subsequent years before.

  • nappan

    Posted Jan 6, 2009 9:30 pm PT

    People forget: gaming is a small part of what MS and Sony do. Gaming news vs overall corporate news is different guys. A company as huge as MS or Sony shrinks and swells with the economy at times like this. It's just the way they work, but this involves capital far beyond their gaming divisions.

  • HappyBB

    Posted Jan 6, 2009 8:48 pm PT

    Man, I thought MS is making money regardless of the current economy condition as its software are still being sold globally. A company this rich is making staff cut!? I can only say that this is the evil side of capitalism. I am sure MS has enough money to survive this financial storm with full staff on board. Sigh...

  • Media_Mind

    Posted Jan 6, 2009 8:41 pm PT

    another one

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