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)