M'SOFT RATTLES MARKETS WITH FIRST-EVER LAYOFFS
By HOLLY M. SANDERS
Microsoft shocked investors and roiled the stock market by rushing out a surprise earnings report and announcing the first major layoffs in the company's history yesterday.
The software giant released second-quarter results that fell short of expectations and refused to issue forecasts for the rest of the year after the sagging economy hurt sales of its flagship Windows operating system.
Moreover, Microsoft said it plans to cut as many as 5,000 jobs over the next 18 months, including 1,400 workers yesterday, and trim other expenses.
Microsoft posted net income of $4.17 billion, or 47 cents a share, down from $4.7 billion, or 50 cents a share, in the same quarter last year. Analysts had been looking for earnings of 49 cents a share.
Revenue grew slightly to $16.6 billion from $16.4 billion - below the $17.08 billion consensus estimate.
The moves will save up to $1.5 billion a year. Still, some analysts and investors called on the company to make deeper cuts to weather the downturn.
Instead of waiting until after the close of markets to make the announcement, as is customary for the West Coast company, Microsoft surprised the Street before the opening bell.
The timing, coupled with the first-ever layoffs, weak results and dismal outlook for the rest of the year, sent the stock down almost 12 percent and weighed on the broader market. Microsoft fell $2.27 to $17.11 in regular trading.
Microsoft said it moved up the timing of the announcement in order to allow more time for "face-to-face conversations" with those affected by the layoffs.
Microsoft shocked investors and roiled the stock market by rushing out a surprise earnings report and announcing the first major layoffs in the company's history yesterday.
The software giant released second-quarter results that fell short of expectations and refused to issue forecasts for the rest of the year after the sagging economy hurt sales of its flagship Windows operating system.
Moreover, Microsoft said it plans to cut as many as 5,000 jobs over the next 18 months, including 1,400 workers yesterday, and trim other expenses.
Microsoft posted net income of $4.17 billion, or 47 cents a share, down from $4.7 billion, or 50 cents a share, in the same quarter last year. Analysts had been looking for earnings of 49 cents a share.
Revenue grew slightly to $16.6 billion from $16.4 billion - below the $17.08 billion consensus estimate.
The moves will save up to $1.5 billion a year. Still, some analysts and investors called on the company to make deeper cuts to weather the downturn.
Instead of waiting until after the close of markets to make the announcement, as is customary for the West Coast company, Microsoft surprised the Street before the opening bell.
The timing, coupled with the first-ever layoffs, weak results and dismal outlook for the rest of the year, sent the stock down almost 12 percent and weighed on the broader market. Microsoft fell $2.27 to $17.11 in regular trading.
Microsoft said it moved up the timing of the announcement in order to allow more time for "face-to-face conversations" with those affected by the layoffs.
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