The jumpiness is understandable: job cuts are certainly coming (and have started in some places, such as EMC’s announcement today that it will slim its workforce by around 6 per cent.) But it’s simply too early to tell how deep they will eventually be, and the most pessimistic predictions at the moment remain largely speculative.
Take the suggestion on tech blog Fudzilla last week that Microsoft was about to slash 15,000 jobs (this “news” got a surprising amount of coverage, no doubt owing to the general lack of other things to report at the time.)
Steve Ballmer dismissed that out of hand when I caught up with him at the Consumer Electronics Show in Las Vegas on Wednesday. His reaction: “Some of the rumours have been particularly wild, irresponsibly wild.”
Separately, another person close to Microsoft ruled out a different report (which has also circulated widely) that the company would announce job cuts next week (Mini-Microsoft, a blog about the company, had started that hare running. I haven’t provided links to these stories because, well, why reward innacurate reports with even more page views?)
That doesn’t mean cuts aren’t coming at some point. Ballmer wouldn’t comment directly, but this sounded ominous: “We will be viewed as a company that is investing more strongly in the future than most in our business - though we may well end up investing less than we would have planned in our future.” The company announces earnings on January 22nd, and investors will certainly be expecting some clear indication of how it is adjusting to the downturn. After all, as Ballmer pointed out, if Intel’s warning of a 20 per cent fall in PC sales holds throughout this year, that will reduce global sales by 60m machines this year.
There have also been warnings that 15,000 or so jobs are about to go at IBM, this time issued by an employee group at the company. Yet though the number would be large, it sill amounts to less than 5 per cent of IBM’s workforce.
The real question: whether the first relatively cautious moves to pare costs will be enough to see the big tech companies through the recession, or whether much more swingeing cuts lie ahead.
