In management circles, the conventional wisdom on layoffs is to cut once and cut deep enough to weather a downturn and keep  surviving employees from getting the jitters. Microsoft went against that philosophy in January when it announced plans to eliminate up to 5,000 positions worldwide -- starting with 1,400 but stretching the rest out over 18 months.

This morning, the company accelerated its plans when it made additional layoffs that bring the total close to 5,000 much sooner than expected. But Microsoft CEO Steve Ballmer's memo to employees won't exactly instill a sense of calm in the people who remain.

"As we move forward," Ballmer wrote, "we will continue to closely monitor the impact of the economic downturn on the company and if necessary, take further actions on our cost structure including additional job eliminations."

To be sure, the situation reflects the unprecedented uncertainty in the economy right now. Microsoft also has taken the unusual step of suspending the earnings guidance it typically gives investors. But the company could have cushioned the blow to employee morale with a more definitive statement -- and perhaps even by making, at the outset, all of the job cuts it could possibly imagine needing to make.

Will further cuts be needed? That will depend in part on Microsoft's success in getting customers to renew their enterprise licensing agreements, the contracts that give big companies access to Microsoft software, upgrades and related services. As it happens, a big batch of those contracts is coming due this quarter, said Matt Rosoff, an analyst at research firm Directions on Microsoft in Kirkland.

"If sales come in way below expectations, I wouldn't be surprised at all if they have to do further layoffs," Rosoff said.

Seattle-based analyst Sid Parakh of McAdams Wright Ragen gave a similar assessment prior to Microsoft's latest financial results, in which the company reported the first year-over-year decline in quarterly revenue in its history as a public company.

Volume-licensing deals have lasting effects on Microsoft's business because they're recorded as revenue over the life of the agreement. Even if companies do renew their contracts, many of them have fewer employees themselves nowadays -- reducing the overall value of the agreements for Microsoft because that translates into fewer "seats" to license the software.

Putting the Microsoft layoffs in context, economists Dick Conway and Doug Pedersen of the Puget Sound Economic Forecaster are projecting that the recession will ultimately remove around 90,000 jobs from the region defined by King, Snohomish, Pierce and Kitsap counties. In raw numbers, that makes the Microsoft job cuts -- now about 2,000 in the state -- a drop in the bucket.

Also cushioning the blow is the fact that Microsoft is continuing to hire in some areas, even as it cuts jobs in others.

However, Microsoft employees receive relatively high wages, compared the regional average, said Conway, who has conducted economic impact studies for Microsoft in the past. That means job reductions there have a bigger relative impact on the economy by cutting further into overall spending on goods and services.

"This is just adding to the already severe recession that we have," Conway said. "Any job cuts are really painful at this point."

It's also the first time the region has needed to grapple with Microsoft layoffs. The current situation is in contrast to the last downturn, at the beginning of the decade, when Microsoft slowed its hiring but didn't make widespread cutbacks.

"This is just indicative of the breadth of this recession," Conway said. "There’s literally no corner of the economy that’s untouched by it. In that regard, it’s a very unusual recession."