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Microsoft cuts 5,000 Employees
Jan 22 2009, 2:04pm CST | by Luigi Lugmayr
As part of today's Q2 earnings report Microsoft announced the already rumored lay-off. Microsoft will eliminate up to 5,000 jobs in R&D, marketing, sales, finance, legal, HR, and IT over the next 18 months, including 1,400 jobs today.
These initiatives will reduce the company's annual operating expense run rate by approximately $1.5 billion and reduce fiscal year 2009 capital expenditures by $700 million.5,000 is not as high as some rumors went and the time frame is pretty long with 18 month. This sounds more like a clean out of unnecessary or under performing employees and not a real financial necessity. Almost all companies will use the economic downturn also as good reason to streamline their employee base.
Microsoft today announced revenue of $16.63 billion for the second quarter which ended Dec. 31, 2008, a 2% increase over the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $5.94 billion, $4.17 billion and $0.47, declines of 8%, 11% and 6%, respectively, compared with the prior year.
Client revenue declined 8% as a result of PC market weakness and a continued shift to lower priced netbooks. However, strong annuity licensing drove Server & Tools revenue growth of 15%. Entertainment and Devices revenue grew 3% driven by strong holiday demand for Xbox 360 consoles with a record 6 million units sold in the quarter.
Via this Microsoft announcement.
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Luigi Lugmayr
Luigi is the founding chief Editor of I4U News and brings over 15 years
experience in the technology field to the ever evolving and exciting
world of gadgets. He started I4U News back in 2000 and evolved it into
vibrant technology magazine.
Luigi can be contacted directly at ml@i4u.com. Luigi posts regularly on LuigiMe.com about his experience running I4U.
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