Feeds

Microsoft axes 5,000 staff as Q2 profit dives 11%

Sales and earnings miss Wall St consensus

Top 5 reasons to deploy VMware with Tegile

Microsoft is slashing 5,000 jobs after it posted a profit of $4.17bn, or 47 cent per share, in its second quarter earnings report, undershooting Wall Street expectations.

The software giant, which saw its shares fall 8.5 per cent to $17.88 following the announcement, said it would not be offering profit forecasts for the rest of the fiscal year.

For the second quarter ended 31 December 2008, revenue climbed slightly by two per cent to $16.63bn. Analysts had forecast $17.1bn for Microsoft’s Q2 results.

It pulled in operating income of $5.94bn, down eight per cent on the same period a year earlier. Net income panned out to $4.17bn, delivering earnings per share of $0.47, two cents less than analysts had expected.

Microsoft will axe up to 5,000 staff in its research and development, marketing, sales, finance, legal, human resources and IT units over the next 18 months, including 1,400 employees who were handed their pink slips today. The firm's current headcount is around 91,000 staff worldwide.

A Microsoft spokesman confirmed to The Register that the firm "anticipates less than two per cent of the 2,900 UK employees" would lose their jobs.

He added that those 60 or so Blighty workers had been part of today's 1,400 staff cull at Microsoft.

The company, which hopes to reduce costs by $1.5bn following the cuts, confirmed it had taken a hit from the significant decline in the PC market, with client revenue dropping eight per cent in the quarter.

"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," said MS boss Steve Ballmer.

"We will continue to manage expenses and invest in long-term opportunities to deliver value to customers and shareholders, and we will emerge an even stronger industry leader than we are today."®

Beginner's guide to SSL certificates

More from The Register

next story
The 'fun-nification' of computer education – good idea?
Compulsory code schools, luvvies love it, but what about Maths and Physics?
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.