McAdams Wright Ragen Analyst Sid Parakh expects more layoffs by Microsoft (NSDQ: MSFT), on top of the 5,000 job cuts announced earlier this year. "Over the last week, we have heard from multiple sources that Microsoft may engage in additional restructuring activities in the near-to-mid term," he wrote in a report today. "While our checks seem to unanimously imply further headcount cuts, there is uncertainty around whether such cuts will be a moderate revision to plans announced in January or is a sizable addition to prior headcount reduction plans."
Microsoft announced in January the first mass layoff in its history, stating it would fire 1,400 employees immediately and eliminate up to 3,600 additional positions over the next year-and-a-half. Parakh correctly predicted that round of lay offs in a research report a week before the announcement, when he wrote that Microsoft was expected to cut between 6,000 to 8,000 jobs.
Last week, Microsoft General Counsel Brad Smith said that nothing had changed in the company's plans and that it still expected to cut an additional 3,600 jobs. A Microsoft spokeswoman would not comment on the report stating, "As we said in January, we will continue to assess the market and economic situation over the next 18 months and make adjustments as needed. Beyond that, we have no other details to share."
Parakh writes that the new restructuring is "likely prompted by continuing macroecconomic/business weakness." The company reports its first quarter earnings Thursday.
By Joseph Tartakoff