New York, Jan 23: Microsoft Corporation on Thursday, Jan 22 said it would layoff layoff 5,000 jobs. Microsoft would also stop offering profit forecasts for the rest of the fiscal year. Microsoft said it will eliminate up to 5,000 jobs in research and development, marketing, sales, finance, legal, human resources and information technology over the next 18 months, including 1,400 jobs.
The weakness of the PC market is the reason for the layoffs, Microsoft blamed. Its shares fell 8 per cent in early trading. Microsoft posted a profit of $4.17 billion, or 47 cents per share, in its fiscal second quarter ended December 31, versus a profit of $4.71 billion, or 50 cents, a year earlier. According to Reuters Estimates analysts were looking for earnings per share of 49 cents.
Revenue rose 2 per cent to $16.63 billion, missing the average analyst forecast of $17.1 billion. “Clearly business conditions are worse than people were expecting," said Richard Williams, analyst at Cross Research.
“This is a substantial amount of jobs cuts. Microsoft has never had a layoff like this in my knowledge and it's sending a signal that the times are definitely changing." That amounts to about 5 per cent of its estimated 95,000 work force. Microsoft said these moves would help cut its annualized operating expense by about $1.5 billion and reduce fiscal year 2009 capital expenditures by $700 million.
Travel spending of the company will also be cut by 20 pe cent. It will reduce spendin gon vendors and contingent staff.
OneIndia News (With inputs from Agencies)