US software giant Microsoft announced the most sweeping job cuts in its history on Thursday as a worsening economy and weak spending on technology sent quarterly profit sharply lower.
Releasing its results for the second quarter of its fiscal year, Microsoft said it was cutting up to 5,000 jobs, or 5.5 percent of its workforce, over the next 18 months.
The Redmond, Washington-based company said net profit fell by 11 percent in the quarter from a year ago to US$4.17 billion on a revenue of US$16.63 billion, a 2 percent rise from a year ago.
It said earnings per share were US$0.47 for the quarter that ended on Dec. 31, less than the US$0.49 per share forecast by analysts.
“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,” Microsoft chief executive Steve Ballmer said in a statement. “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.”
Ballmer’s reassuring words failed to prevent Microsoft’s shares from plunging on Wall Street, where they lost 11.71 percent to close at US$17.11.
“In light of the further deterioration of global economic conditions,” Microsoft said it was eliminating “up to 5,000 jobs in R&D [research and development], marketing, sales, finance, legal, HR [human resources], and IT [information technology] over the next 18 months, including 1,400 jobs today.”
Microsoft employs some 91,000 people and rumors of job cuts at the world’s biggest software firm had been circulating for weeks.
The company said the move was among various steps designed to manage costs, “including the reduction of headcount-related expenses, vendors and contingent staff, facilities, capital expenditures and marketing.”
“These initiatives will reduce the company’s annual operating expense run rate by approximately US$1.5 billion and reduce fiscal year 2009 capital expenditures by US$700 million,” Microsoft said.
In a conference call with reporters and analysts, Ballmer said he did not expect a “quick rebound” for the economy.
“The economy shrinks and then it grows from a lower base. So no, I’m not expecting a bounce,” he said.
The company founded by Bill Gates declined to release an outlook for the remainder of the fiscal year, citing the “volatility of market conditions going forward.”
“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,” Microsoft chief financial officer Chris Liddell said. “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.”
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS