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Microsoft cuts 5,000 Employees

Jan 22 2009, 2:04pm CST | by , in News | Technology News

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Microsoft cuts 5,000 Employees
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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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