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Microsoft To Miss Guidance, Announce Layoffs

  • Reuters, Wednesday, January 21, 2009 11:15 AM
The ax is expected to fall tomorrow after Microsoft delivers its fourth quarter earnings.

McAdams Wright Ragen analyst Sid Parakh is predicting hefty layoffs. "Checks indicate that Microsoft is likely to engage in headcount reductions to the tune of 6,000 to 8,000 employees or 6-8% of its 95,000 workforce," he tells Reuters. "Our checks also revealed some speculation over the potential for a second round of cuts in some groups sometime later in the year."

Meanwhile, analysts are expecting the software giant to fail to meet even its own guidance tomorrow. "All eyes are on the forecast," said Jefferies & Co analyst Katherine Egbert. "Expectations for the guidance are pretty low." Analysts on Wall Street are looking for quarterly revenue of $17.1 billion, according to Reuters Estimates, short of Microsoft's own target of $17.3 billion to $17.8 billion.

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