Microsoft to cut up to $500m in spending |
Connect with TechFlash on our Facebook page for all the latest technology news headlines and commentary, plus information and access to special events, photos from events, promotions and more.
Today On Techflash
- Can Microsoft overcome the smartphone app gap?
- Hey recruiters: Here's an R&D lab run by, and for, students
- Apps that waste your time (in a good way): Execs' addictions
- WTIA announces Industry Achievement Award finalists
- Analyst sees 7-inch iPad in Apple future
- Check out this app: Executives list the ones they use most
Mass High Tech
- Microsoft Build: Windows 8 preview a hit, but are investors unhappy?
- Build an app in a day at Mobile App Hackathon
- Beefed-up Skype for Windows; Indie author joins Amazon's 'Kindle Million Club'
- Only solution to Xbox 360 update error is new console
- Ballmer: Windows Phone update 'Mango' has over 500 new features
Microsoft to cut up to $500m in spending
Microsoft
Chris Liddell
Microsoft will reduce its operating expenses by as much as $500 million this fiscal year in the face of growing economic uncertainty, the company's chief financial officer told analysts today. The company earlier reported first-quarter earnings that beat Wall Street's expectations, but it also reduced its earnings projections for the year.
Here's a portion of the remarks made by Chris Liddell, the company's CFO, during Microsoft's call with analysts.
For the first two months of this quarter, we experienced much the same economic conditions as we saw during the second half of fiscal 2008, with demand actually a little better than our historic seasonality. However, in September, as the credit crisis unfolded, many partners and customers were faced with market uncertainty and credit restrictions, which impacted the rate at which they purchased software. We're seeing this continue into October, and while we're optimistic about the actions the governments have taken to unfreeze the financial markets, there will inevitably be some spillover. ...Those comments are likely to get lots of attention among Microsoft's employees. In the past, cutbacks in operating expenses have meant reductions in employee perks. The big question: Will the free towel service survive?
In the near term, we're reassessing our business plan and pulling back spending in lower-priority areas. As a result, built into our guidance is a $400 to $500 million decrease in operating expenses. This savings can be categorized as follows. Lower head-count related costs, as we've reviewed our hiring plans, and making adjustments to our head-count growth. Lower marketing expenses, as we're adjusting our spending plans to correspond to our updated economic outlook. Lower (capital expenditures) on data centers, and other general savings, including travel expenses and vendor services.
These savings will progressively layer in, translating into economic savings in particular later this year, and carrying forward into the next fiscal year, as well. We are also putting in place other initiatives on a contingency basis that we can either dial up or down as we see economic changes unfold. If macroeconomic conditions worsen, then we will endeavor to reduce our operating expenses accordingly.
If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.
TechFlash Team
Recent Sponsor Posts
Who's creating today's energy efficient buildings? Find out at the BetterBricks Awards, Feb. 16
BetterBricks Awards salute the individuals leading the way for high performance commercial buildings with an emphasis on energy efficiency. Join us as we recognize these standout green building professionals.
Award categories include: Advocate; Architect/Designer; Facility Manager/Operator; and Owner/Developer.
Keynote Speaker: Kevin Kampschroer, Director of U.S. GSA's Office of Federal High Performance Buildings. Kevin leads the U.S. General Services Administration's efforts in building sustainability and accelerating industry adoption of sustainable principles across all aspects of a building's life.
Register here by February 10!
If you are interested in buying a table, email Monica Alquist or call her at 206-876-5404.
The Triple Door Presents: The Atomic Bombshells "J'ADORE!: A Burlesque Valentine"
Seattle's reigning Burlesque super-troupe delivers a gorgeous and glittering VALENTINE featuring some of the Bombshells' most exhilarating acts to date. J'Adore! promises to celebrate l'amour with good humor, style, and a healthy dose of dazzle! Bring a friend, a lover, a family member, or a secret crush, and celebrate with the Valentine's Burlesque spectacular that will leave you shouting: "J'ADORE......The Atomic Bombshells!" The incomparable Jasper McCann emcees with high style and charm.
Please visit www.thetripledoor.net for a full schedule of future performances.
The Triple Door Presents: Bob Mould – See A Little Light: An Evening of Reading and Music
"Bob Mould. Those two words are synonymous with integrity. From Husker Du in the last century to right at this moment, Bob is the real deal, writing and playing music for music's sake. He's a great songwriter and performer. I have been a fan of Bob's for thirty years now with no end in sight." -Henry Rollins
Please visit www.thetripledoor.net for a full schedule of future performances.
Why Choose BDO for your SOC (previously SAS 70) Reports?
BDO’s experience in providing attestation services (SAS 70/SSAE 16, AT 101, AT 201, AT 601, etc.) to a broad range of industries, and our team of skilled professionals distinctly qualifies us to serve as your company’s Service Auditor. By leveraging the BDO global network of control specialists, we are poised to provide global services in more than 1,000 offices and across 119 countries. Many organizations find that investing in reports on controls may result in benefits, including:
• Increased client confidence
• Improved competitive advantage
• Minimization of frequent audits
• Streamlined business processes and controls
• Enhanced risk management
For detailed information contact Paul Martini at pmartini@bdo.com.
