This is no time for Microsoft layoffs

The rumor mill has been working overtime with rumors of impending Microsoft layoffs. But now isn't the time for the company to be letting people go.

The Microsoft Blog in the Seattle Tech Report quotes Oppenheimer & Co. analyst Brad Reback as saying in a report that Wall Street would welcome layoffs at Microsoft and that layoffs would be seen as a "signal that profitability is more important than revenue growth during this very difficult time."

The blog goes on to say that Reback calculated

that a 10 percent cut in Microsoft's work force would offset a $3 billion decline in the company's revenue, by saving about $1.2 billion a year in costs. That would amount to about 10 cents of earnings per share.

Let's hope that Microsoft doesn't listen to Wall Street's call. After all, look at the Wall Street's recent track record of driving the economy not just into a ditch, but off a cliff. Would you want to take advice from people who drive like that?

Wall Street analysts are notoriously near-sighted, chasing the quick buck in the form of larger dividends next quarter or a quick boost to stock prices. What's good for Wall Street is not good for Microsoft, or for the rest of the country, for that matter.

Clearly, layoffs will hurt the general economy and the rest of the country. But they'll hurt Microsoft as well. They would slow down development, hurt morale, and focus on the short-term, rather than the long-term. And they would certainly give Google a big boost.

So here's hoping that Microsoft ignores Wall Street, and does the right thing for itself, for its workers, and for the general economy.