Microsoft Lay-Off Rumors Continue, Management Won't Deny

(MoneyWatch)  There are rumors that Microsoft is planning some massive layoffs in the middle of January. The way the company is handling questions can only lead you to think that any reports have some basis in truth.

Some reports say that staff has already heard and that the numbers could be as high as 17 percent worldwide. That's a huge cut, and given that Microsoft had been crowing a few months ago about its record fiscal year 2008, you have to wonder just how far south things are turning.

So far, we haven't managed to confirm what departments or regions will be hit the worst, but we're hearing that MSN might be carrying the brunt of the layoffs. We're also hearing rumors about the possibility of somewhat larger staff cuts at Microsoft EMEA (Europe, Middle East and Africa).

The rumors apparently started in the UK at the beginning of this week, but slowed down. According to Microsoft's PR reps, the company is officially making no comment. Given that management there has never seemed to be shy to dismiss stories out of hand, it seems significant that it won't make any statement at all. To be fair, the 2009 second quarter ends with January, so you could argue that there's a quiet period right now, but if there was no basis, you'd think that Steve Ballmer, et. al., would want to stay "on message" and put an end to useless speculation.

If there are layoffs, having MSN take the brunt also isn't surprising, given how badly that division has done competitively. Might that make Yahoo a more attractive prospect again as a way to get established in what Microsoft leadership has indicated is a strategic growth area?

Santa unemployment image via Flickr user Mike Licht, NotionsCapital.com, CC 2.0.