In the first time in the company's history, Microsoft will perform broad layoffs, according to THE NEW YORK TIMES. Based in Redmond, Washington, the world's largest software company will let go 5,000 of its 94,000 workers over the next 18 months, including 1,400 people this week.
The company reported the cuts as part of its second-quarter results, an 11 percent drop in net income to $4.17 billion from $4.71 billion in the same period a year ago. A sharp drop in sales for personal computers is blamed for the cuts in personnel.
"We are certainly in the midst of a once-in-a-lifetime set of economic conditions," Microsoft's chief exec, Steven A. Ballmer, said during a conference call. "The economy is resetting to a lower level of business and consumer spending."
Revenue for the quarter rose 2 percent to $16.63 billion. Earnings of 47 cents in the quarter missed Thomson Reuters' forecast by 2 cents.
Earlier this week, Intel, the world's largest computer chip maker, reported it would lay off at least 5,000 people and close some test and manufacturing facilities. Hard drive maker Seagate and chip makers Advanced Micro Systems and NVIDIA have also seen slow sales that forced layoffs. Sony is also expected to lay off about 5,000.
Microsoft's Xbox 360 console sales rose 3 percent in the second quarter, selling a record six million systems over the holiday shopping season.
