Microsoft earnings off target; unveils job cuts

Microsoft announced disappointing second-quarter results that missed Wall Street estimates and refrained from providing guidance for the coming quarter, citing uncertain economic environment. The software major also said that it will cut up to 5,000 jobs, or 5.5% of its global workforce, over the next one and a half years. Microsoft will slash 1,400 jobs immediately, with the rest of the cuts coming by June 2010. The company also said it will freeze employees' pay in 2009. Microsoft said it will save about US$1.5bn in operating expenses and US$700mn in 2009 capital expenditure from the twin measures. The job reduction is the first such announcement in Microsoft's 34-year history.