updated 10:00 pm EDT, Tue July 6, 2010
Microsoft cuts hint not back to full growth
A late-breaking scoop from within Microsoft has revealed that the company is close to cutting jobs as soon as Wednesday. The headcount lost isn't known but wouldn't be as large-scale as with the over 5,800 jobs cut at the lowest point of last year's economic crash. They come after the end of Microsoft's fiscal year in June and would partly reflect a shift in product focus.
Those speaking to TechFlash couldn't discern which divisions were most likely to be hit by any staff reductions, although they did note that Microsoft would keep hiring in other areas.
While not much has been exposed, a possible focus of cuts may be the Windows Phone team. It recently saw a major shakeup following the departures of J Allard and Robbie Bach that scrapped much of the oversight between the mobile group and CEO Steve Ballmer. Also, the death of the Kin saw the failed phone line's staff rolled back into the Windows Phone team, a move that at many companies can trigger layoffs to reduce overhead.
The company has largely returned to health with a Windows 7-related bounce back in the winter, but it's still understood to be growing cautiously both due to a still uncertain economy as well as multiple weak points in its business. Microsoft continues to bleed money in Bing and other online services, and its practical reboot of its mobile strategy has both seen the failure of Kin as well as customers caught between the soon-to-be-obsolete Windows Mobile and the future release of Windows Phone 7. Corporate buyers also have yet to adopt Windows 7 on a wide scale due to legacy software and a desire to see the new OS thoroughly tested in the field before rolling out upgrades.