Microsoft to Slash 5% of WorkForce

Microsft revealed today that they are to cut 5,000 jobs over the next 18 months as the company drops 11% on profits.

 NMA had this to say:

 Microsoft is to cut 5,000 jobs, approximately 5% of its entire workforce, over the next 18 months as the company looks to make drastic cost cuts throughout the business.

The redundancies will come from Microsoft’s R&D, marketing, sales, finance, legal, HR, and IT divisions, with 1,400 to leave the company today.

Microsoft said the cuts would reduce operating expenses by up to $1.5bn (£830m) and fiscal year capital expenses through 2009 by £700m (£387m).

The announcement came as the company posted profits of $4.71bn (£2.6bn) for the three months to 31 December, a decrease of 11% year on year, with revenues up by 2% to $16.63bn (£9.19bn).

The company conceded that the next year would be challenging, stating profits and earnings over the second half of 2009 would almost certainly be lower than the same period last year.

Chris Liddell, Microsoft chief financial officer, said, “Economic activity and IT spend slowed beyond our expectations in the quarter, and we acted quickly to reduce our cost structure and mitigate its impact.”

“We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year,” he added.

Steve Ballmer, Microsoft CEO, said, “While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach”