20th January, 2009 – Microsoft Corporation is likely to declare thrift measures when it is going to announce its earnings for the second quarter on Thursday, 22nd January, 2009. As per a news report, the measures it may adopt comprise of curbing of its real estate growth plans that were declared earlier.

According to the Seattle Post-Intelligencer, Microsoft would slow down the construction process of every new building in Redmond, Washington, but one. This report was founded on an internal Microsoft Powerpoint presentation received by the newspaper.

The headquarters of Microsoft are based in Redmond, which is a Seattle suburb. The newspaper also informed that the maximum portion of its leases would not be renewed when they are due for renewal this year (2009) and the following. The Seattle Post-Intelligencer further informs that Microsoft would be able to save $607 million by the end of the fiscal 2010 through these cost-cutting steps. Microsoft spokesperson Lou Gellos substantiated in his statement that they would not be renewing a number of leases as soon as they run out or lose validity. He categorically stated that the lease nonrenewals were components of the plan of Microsoft from the very beginning. However, he assured that the construction cutbacks were in view of the economic slump.

The Seattle Post- Intelligencer reports that the probability of wide layoffs at Microsoft, which according to some reports might be declared later this week, stays “vague”.

Microsoft hires 94,000 staff globally, comprising 40,000 in the Seattle locality. In 2007, the employee strength of Microsoft went up by 16%. The Powerpoint presentation which was prepared by the real estate and facilities group of Microsoft, incorporates the presumption that the headcount of Microsoft would not increase in the coming two and half years. Nevertheless, it would begin increasing by 3% a year subsequent to that period, as per the Seattle Post-Intelligencer.

The number of job cuts that might be declared this week has been informed to be as many as 16% of the employee strength of Microsoft or 15,000, even though a large number of analysts anticipate it to be much less. In case a layoff takes place, this would be the first extensive layoff of Microsoft in spite of the fact that there were minimum eight minor layoffs in the past seven years, aggregating to nearly 1,100 staffs.

Regardless of the real estate curbs, Microsoft intends to maintain perquisites for its staff like the van shuttle to the Redmond campus and free beverages, as per the information provided by the newspaper.