Sad Day For Microsoft: 5,000 Laid Off, Earnings And Revenues Down

First broad layoffs in the company’s history:
In the midst of declining earnings, Microsoft announced today that it will be laying off up to 5,000 people over the next 18 months, or about five percent of its total workforce. Of that amount, 1,400 are losing their jobs today. Microsoft also says that it will continue to hire and that the net headcount reduction over the next 18 months should amount to between 2,000 and 3,000. The layoffs, along with salary freezes, the elimination of contract workers, lower marketing spending, and other measures are expected to reduce operating expenditures by $1.5 billion this fiscal year.

The company reported revenues of $16.6 billion in the quarter, a two percent increase but $900 million lower than it had expected. The stock is down 7 percent on the news. Also, in an admission of the great economic uncertainty facing all companies, Microsoft is no longer giving guidance for future earnings.