It appears Microsoft has taken the hedge clippers to its payroll, trimming hundreds of jobs across the globe, with many of the losses occurring at the software giant's Redmond headquarters. This is apparently part of a "strategic realignment" that the company undergoes annually, but Microsoft employs almost 90,000 people, so dismissing hundreds doesn't exactly count as an exodus. In fact, the layoffs will probably balance out with the normal new hires taken in over the course of a year - the company picked up 416 people in the last quarter alone.
Given the Kin's recent belly-flop and Microsoft's somewhat lackluster performance (Apple recently bruised the giant by overtaking its total net worth) one might imagine the cuts would come to areas that have suffered recent public humiliation. However, rumors so far suggest that marketing positions are being targeted. Comments from posters on Mini-Microsoft, an unofficial Microsoft employee blog, indicate that at least some cutbacks have also occurred in other parts of the company. Because this is not a mass downsizing, Microsoft isn't likely to issue a press release on the matter - and that means only Microsoft HR knows how many people were cut and from where.
In any case, the sky is not falling in Redmond, although it is no doubt a dark day for those who got the axe.