No way Microsoft is laying off 17% workforce

Recently the rumors have escalated enormously concerning whether Microsoft would be laying off 17% of their workforce. The FudZilla blog was the one who originally reported this outrageous rumor, and some other blogs/news sites claimed to have confirmed it and/or predict the same.
Very soon, Microsoft will be releasing its earnings report, and that's what has caused all these rumors to spike, in discussion of exactly how much Microsoft has been impacted by the depression.

Now, first of all, Microsoft has been barely affected considering some of the problems in other industries and companies. Seriously, Microsoft has a huge $19Bil + in their bank, no wonder they don't have that many problems. If anything, they're probably trying to take advantage of the issues currently in its competitors, and attempting to improve themselves.
I highly doubt Microsoft profits will have gone down by a large margin, albeit it will have been affected somewhat, considering that consumers are no longer buying as much, and businesses will not be investing as much either. However, the nature of their business causes many businesses and consumers to continue purchasing their products even during a downturn in the economy.
Microsoft most likely has weathered the economic problems so far much better off than other companies, and I believe they will exceed analyst expectations in terms of earnings and profits. Unlike other companies, Microsoft has continued to invest in new products and research to develop new product lines or continue old product lines. They have also improved various existing betas and services. In fact, you can even see the vast list of beta applications and platforms they have available on their Microsoft Connect website. Just this past half of 2008 and now 2009, Microsoft released beta versions of notable products including Internet Explorer 8 Public Beta 2, Windows Live Essentials, Windows 7, Windows SDK and others. It's obvious that Microsoft isn't going to stop their R&D anytime soon, nor are they cutting back on expenditures by a large margin.
Also taking a look at Xbox 360's enormous success this holiday season compared with other products during the recession we've experienced, Microsoft still holds major advantages and they are complying with customer demands for cheaper products, while sustaining viability and increasing market to defeat the competition. Plus, I think Microsoft is in excellent position to take maximum advantage of the depression with the release of Windows 7. From my experience, Windows 7 is already fine and ready to go whenever Microsoft wants. All they're looking for is some feedback and perhaps minor bug fixes.
With Windows 7's massive performance upgrade and improvement from Vista's issues, most customers can't wait for getting their hands on Windows 7. Especially now that there's a depression going on which might last quite a while, Microsoft's plan to market cheaper products will definitely help them. Customers no longer desire expensive computers as much as before, so many are getting the low-cost laptops/desktops with as much performance as they can pack without upping the price. Thus, Microsoft's Windows 7 improvements allow them to be in excellent position to market to these customers and will ultimately make Windows 7 highly successful, as well as get rid of Vista's tainted brand.

In such a situation where their money is plentiful, having tiny debt compared to their vast reserves of capital, and where they are in a great position to be marketing and creating new products, they can't possibly be seeking to downsize by 17%. that rumor is absolutely outrageous. While it may be true that Microsoft has slowed on hiring, that's just a part of the way a depression works. Nobody wants to overspend during such times because you never know when it'll really end. Microsoft may be looking at small layoffs in certain sections that aren't proving to be profitable, in the manner that they have always used to deal with economic issues. I highly doubt they will engage in massive company wide layoffs, unless they think they can become even more profitable, in which case I still doubt the layoffs will be as large as 17%, because such numbers are generally only shown by companies in serious debt and are failing in some way. This is one of the most profitable companies in the world that we're talking about here, and they have practically no debt, while their cash reserves are enormous.

Obviously, Microsoft isn't going to lay off 17% of their work force, but only time will tell, and we will find out their situation as the earnings report comes in. I feel inclined to believe their earnings may have increased, rather than slowed down.

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