Things are getting difficult

Jan 21, 2009 18:01 GMT  ·  By

The worldwide economy isn't doing so well, as the recession is affecting almost every branch of the industry. It now seems that, although Microsoft considers its Xbox 360 console and its whole game and entertainment division recession-proof, things aren't going too well with the other departments in the major corporation.

According to analysts interviewed by Reuters, Microsoft will see its profit go down, way below the forecasts made by the company for its second financial quarter, which ended on December 31, 2008. The industry specialists claim that various predictions made by the representatives of the Redmond-based giant won't be met due to the economy, which has had a great impact on the stock prices and on profit, which won't be the same as the one from the last couple of years.

Due to these possible problems, it seems that Microsoft will employ some major cost-cutting measures and will prepare to lay off a pretty big number of employees from various departments within the company. This move is backed up by the fact that other big companies, like Sony, AT&T or AMD, have employed other measures in order to maintain a big enough profit in the long run.

“[Sources] indicate that Microsoft is likely to engage in headcount reductions to the tune of 6,000 to 8,000 employees or 6 percent to 8 percent of its 95,000 workforce,” said McAdams Wright Ragen analyst Sid Parakh. “Our [sources] also revealed some speculation over the potential for a second round of cuts in some groups sometime later in the year.”

Although Microsoft officials haven't commented such a thing, the facts still remain and the company must cut back on costs if it wants to maintain a healthy profit in order to develop new products. Most probably, such a measure won't affect the Xbox 360 and entertainment division very much, but you never know where the big corporation decides to reduce some positions.