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$4 Billion in Net Income, 5000 Jobs Cut, Who's going to buy?

Ok, so operating and net income was down, but Microsoft still MADE 4 Billion dollars last quarter.  It seems pretty obvious to me that many firms are using the current economy as an excuse to slash jobs in hopes of boosting stock perfromance and bonuses.

Quick note to those making these cuts, if everyone keeps slashing jobs, there will be no one to buy your products and services.  The downward spiral will just continue.

Think about it.


Software giant Microsoft is slashing 5,000 jobs over 18 months in its first company-wide layoffs, including 1,400 jobs today following disappointing second quarter results.

While revenue of $16.63 billion was up 2% for the quarter, which ended December 31, over the same period in 2007, operating income was down 8%, to $5.94 billion, the company reported. Microsoft is taking “additional steps to manage costs, including the reduction of headcount-related expenses, vendors and contingent staff, facilities, capital expenditures and marketing,” according to a company statement.

Net income decreased 11% to $4.17 billion, and diluted earnings per share decreased 6% to 47 cents. 


Yellow Dog Blog

As a business owner, if my net is down 11% I would be concerned. Maybe HR was a little too aggressive and "overhired" but I don't intend on evaluating MSFT financials. But my thought is...that MSFT is no longer "remarkable" as Seth Godin continues to drive home. Perhaps the % drop is due to MSFT falling asleep at the wheel. Maybe they still need 5000 employees, but they need to be more creative thinkers. Back to the numbers, MSFT net is 25% of revenues. To me, that looks like enough cushion to take some risks in order to be remarkable. Looks like they could risk a million or a billion.


Yellow Dog has a point. I agree that we would also look at all kinds of issues if our net fell 11%, but with a war chest like that, and the manpower to work it, striving to be remarkable doesn't seem unreasonable!

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