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January 22, 2009
Earlier this morning, Microsoft confirmed that it will cut 5,000 jobs in 2009 and 2010, citing further
deterioration of global economic conditions.
The software behemoth also posted lower fiscal second-quarter earnings that missed Wall Street analysts'
projections.
The Redmond company will cut 1,400 jobs effective immediately. The rest of the cuts will come by June
of next year. The company said it will save about $1.5 billion in operating expenses and $700 million this year
alone in various capital expenditures.
Chris Liddell, Microsoft's chief financial officer said "as a whole, overall economic activity slowed beyond
our most pessimistic expectations in the quarter, and we had to act quickly to reduce our overall cost
structure and minimize its impact as much as we can."
Liddell added "we are planning for economic uncertainty to continue through the remainder of 2009,
almost certainly leading to lower revenue and earnings for 2009's second half relative to the corresponding
period in 2008."
However, the software giant did report revenue of $16.63 billion for the quarter, up about 2 percent
from $16.37 billion in 2008.
Microsoft also announced second-quarter net income of $4.17 billion, a drop of more than 10.9 percent
from a year earlier.
According to an earlier consensus compiled by Briefing.com, Microsoft reported earnings per share of
just 47 cents, missing Wall Street analysts' projections of 49 to 50 cents.
Source: Microsoft.
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