The plan is still under consideration and may not be enacted if Microsoft can find other means of cutting costs, the site cautions. Should the reduction take place, the sources indicate that the cuts will be "far less" than recent rumors have suggested.

Currently, Microsoft has over 91,000 employees worldwide. Earlier rumors had claimed that Microsoft could cut as much as 15,000 positions, or 16% of its work force.

How or if the possible layoffs would affect Microsoft's Entertainment & Devices Division--the branch responsible for the Xbox 360--was not specified.

Last week, Microsoft CEO Steve Ballmer admitted that economic conditions were forcing the company to think about cost-cutting measures, but declined to offer specifics.

Frequent rumors of significant layoffs have also beleaguered rival console maker Sony, following an earlier cost-reduction plan that saw the company axe 16,000 jobs.