Microsoft missed Q2 revenue and earnings forcasts. Revenue was $16.63 billion versus $17.08 billion expected. EPS was $0.47 a share, below $0.49 expected. So what to do?
Microsoft today announced they’d be laying off 5,000. Cuts will come across all divisions, including: "R&D, marketing, sales, finance, legal, HR, and IT" which Microsoft hopes will save it $1.5 Billion/year.
In light of the further deterioration of global economic conditions, Microsoft announced additional steps to manage costs, including the reduction of headcount-related expenses, vendors and contingent staff, facilities, capital expenditures and marketing. As part of this plan, 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.
For some more interesting stuff check what makes Microsoft tick here:
Statements in this release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:
— challenges to Microsoft’s business model;
— intense competition in all of Microsoft’s markets;
— Microsoft’s continued ability to protect its intellectual property
— claims that Microsoft has infringed the intellectual property rights of
— the possibility of unauthorized disclosure of significant portions of
Microsoft’s source code;
— actual or perceived security vulnerabilities in Microsoft products that
could reduce revenue or lead to liability;
— government litigation and regulation affecting how Microsoft designs
and markets its products;
— Microsoft’s ability to attract and retain talented employees;
— delays in product development and related product release schedules;
— significant business investments that may not gain customer acceptance
and produce offsetting increases in revenue;
— changes in general economic conditions or the availability of credit
that affect the value of our investment portfolio or demand for
Microsoft’s products and services;
— adverse results in legal disputes;
— unanticipated tax liabilities;
— quality or supply problems in Microsoft’s consumer hardware or other
vertically integrated hardware and software products;
— impairment of goodwill or amortizable intangible assets causing a
charge to earnings;
— exposure to increased economic and regulatory uncertainties from
operating a global business;
— geopolitical conditions, natural disaster, cyberattack or other
catastrophic events disrupting Microsoft’s business;
— acquisitions and joint ventures that adversely affect the business;
— improper disclosure of personal data could result in liability and harm
to Microsoft’s reputation;
— outages and disruptions of online services if Microsoft fails to
maintain an adequate operations infrastructure;
— sales channel disruption, such as the bankruptcy of a major
— Microsoft’s ability to implement operating cost structures that align
with revenue growth.
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