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Published: Thursday, 1/22/2009

Microsoft to slash 5,000 jobs, misses on 2Q profit


REDMOND, Wash. Microsoft says it will slash 5,000 jobs over the next 18 months as it reported an 11 percent drop in second-quarter profit.

The software giant said Thursday the moves were driven by deteriorating global economic conditions and lower client revenue, resulting from weakness in the PC market and a shift to lower-priced notebook models.

The Redmond, Wash.-based company says profit slipped to $4.17 billion, or 47 cents per share, from year-ago earnings of $4.71 billion, or 50 cents per share.

It says total revenue edged up 2 percent to $16.63 billion, as server, tools and entertainment sales helped offset an 8 percent drop in client revenue.

The results missed Wall Street s forecast for earnings of 49 cents per share on sales of $17.08 billion.

Microsoft Corp. says the job cuts will reduce operating costs by $1.5 billion as it prepares for lower revenue and earnings in the second half of the year.

The company says it is unable to offer profit and revenue guidance for the rest of the year, due to market volatility.

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