Microsoft is one of the biggest and most profitable companies in the technology industry. The company has its hands on many different projects from software to internet search and more. The company is always out to find new methods of making money.
One of its most recent patent applications outlined a method of charging users under a pay-per-use method for computing that would have computers given for free or at a greatly discounted price. Microsoft so far during the global economic crisis has been able to avoid any mass layoffs or restructuring, but according to some reports that may change drastically in a few weeks.
CNET News reports that rumors are circulating that have Microsoft possibly cutting 17% of its global workforce on January 15. If the rumor turns out to be true, Microsoft would be letting go 15,000 people from its 90,000 employee pool.
Earlier rumors had Microsoft laying off a more modest 10% of its workforce. The Microsoft team likely to take the hardest hit according to reports is the MSN search unit. Cuts are likely to come in this unit and other struggling business units.
Microsoft units that are profitable are not likely to see cuts in staff. CNET News quotes industry veteran Henry Blodget saying that. "Unless Microsoft's business has been absolutely crushed in the past two months, there is no reason for the company to suddenly cut this much cost. Microsoft's margins are still fine, and much of its revenue is generated from multi-year contracts."
Blodget does think that there is a potential for restructuring at Microsoft and that any potential restructuring is likely to center around MSN. Blodget says, "The only way we could see Microsoft laying off this many people is if the company decided to eliminate business units. And if Microsoft did decide to restructure its business, it would likely sell rather than shut down divisions, including MSN.”
Microsoft is looking hard at areas where it can make money or save money. Making money is the reason that Microsoft keeps postponing the retirement of Windows XP. XP is huge in the netbook market thanks to the fact that most netbooks won't run Vista and Linux isn't appealing to many customers.
After the long running and ultimately fruitless attempt by Microsoft to purchase Yahoo, many will find it very unlikely that Redmond would suddenly try to sell its MSN unit to Yahoo. Microsoft and many other firms see Internet advertising as the future and removing itself from that market wouldn't make much sense for Microsoft. However, if Blodget is correct and Microsoft gave MSN to Yahoo in exchange for a large part of Yahoo it could potentially pull Yahoo from the brink of collapse and result in a search engine with more draw than Google.