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.

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