Microsoft layoff rumours still going on

Analyst: 6-8% Microsoft layoffs:

Microsoft may be preparing for layoffs, but the cutbacks won't be as severe as the 15 percent predicted in some media reports, writes analyst Sid Parakh of Seattle-based McAdams Wright Ragen in a note to clients this morning.

"Checks indicate that Microsoft is likely to engage in headcount reductions to the tune of 6,000-8,000 employees, or ~6%-~8% of its ~95,000 workforce, a number much lower than cited in the media," Parakh wrote. "A notable portion of those cuts are likely to be in the Seattle area considering that over 40,000 of its employees are in this region. Our checks also revealed some speculation over the potential for a second round of cuts in some groups sometime later in the year, although this could not be substantiated."

Underperforming employees are likely to be most vulnerable, in addition to contractors, he wrote.

Separately, Parakh lowered his estimates for the company's upcoming quarterly results to $16.8 billion in revenue and earnings of 48 cents per share, down from the previous estimates of $17.4 billion and 51 cents.