Microsoft trims its workforce

Microsoft is cutting a few hundred jobs in layoffs that began Wednesday.

The reductions are part of a review of corporate priorities at the end of the fiscal year, according to a company source, who did not want to be identified. Microsoft's fiscal year ended June 30.

The annual review usually involves reorganizing, investing and divesting in different areas based on the company's strategic direction, the source said.

The job cuts are far smaller than the layoffs in 2009, when Microsoft eliminated 5,800 jobs in the first companywide reduction in its history.

The company's current head count is 88,596 worldwide, with 39,824 of those employees working in the Puget Sound area. The company is 4 percent smaller than it was a year ago, when it employed 92,736 worldwide.

Microsoft declined to make a statement on rumors earlier this week of layoffs.

During last year's layoffs, Microsoft continued to create jobs in specific areas. Last quarter, it hired more than 2,100 people. Two quarters ago, it hired more than 1,800.

The downsizing came a week after Microsoft retreated from its mobile phone Kin, which was available for sale for only a little more than a month.

The Kin was billed as a mobile phone designed for the young and socially networked. It had been priced at $50 and $100 before price cuts by Verizon Wireless, the only carrier that sold the phone.

The layoffs that began Wednesday were made throughout the company; the source declined to say which groups were affected.

Anonymous comments on the Mini-Microsoft blog, a popular online water cooler for employees and others, said jobs were eliminated in marketing areas and some other groups in the company.

Microsoft has not contacted the state's Employment Security Department to report layoffs under the federal Worker Adjustment Retraining and Notification Act, according to department spokeswoman Sheryl Hutchison.

Large companies like Microsoft are required to notify the state if they close a plant with 50 or more employees or if they have a mass layoff that involves more than 500 employees at any single location.

"They have probably not passed the threshold," Hutchison said.

Microsoft stock rose 2 percent to $24.30 Wednesday.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com