Analysts predict Microsoft could cut 8% of workforce

Software giant expected to take cost cutting measure after reporting on its quarterly results

Analysts are predicting that Microsoft will miss its own quarterly target, resulting in thousands of job cuts this week in an attempt to weather the economic downturn.

Microsoft's profits are now expected to be reported as USD 0.49 a share for the quarter ended December 31, as opposed to what the company had forecasted at USD 0.51 to USD 0.53 a share, according to Reuters.

Furthermore the company's quarterly revenue is now expected to come in at USD 17.1 billion, short of Microsoft's target of USD 17.3 billion to USD 17.8 billion.

Full-year forecasts are likewise expected to be lower than previously estimated, with net income thought to have dropped 10 per cent to USD 17.77 billion, while revenue projections are down 4.4 per cent at USD 63.68 billion.

This downturn in the company's fortunes has led many anlysts to reaffirm claims that the software giant is planning to trim staff numbers.

"Checks indicate that Microsoft is likely to engage in headcount reductions to the tune of 6,000 to 8,000 employees or 6 percent to 8 percent of its 95,000 workforce," said McAdams Wright Ragen analyst Sid Parakh.

"Our checks also revealed some speculation over the potential for a second round of cuts in some groups sometime later in the year."

Over the past year, Microsoft's shares have dropped 41 per cent, while the S&P 500 Index only dropped 38 per cent during the same period.

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