Microsoft prescribes permanent ‘diet’ amid sales slump

“Microsoft Corp., coping with its first annual sales drop, will make frugality a new way of life, Chief Financial Officer Chris Liddell said,” Dina Bass reports for Bloomberg. “‘This is not a crash diet where you stop eating for a couple of quarters — this is a new diet regime where you slim down and stay slim,’ Liddell, 51, said in an interview at Microsoft’s headquarters in Redmond, Washington. ‘It’s actually about dialing up the importance of costs.'”

MacDailyNews Take: It’s actually about Microsoft’s – quote – leadership – unquote – that’s full of horseshit. Liddlell and Ballmer and the rest of Microsoft’s failing executive team should go on a permanent horseshit diet.

Bass continues, “Microsoft, which slashed $3 billion in operating expenses and cut about 5,000 jobs this year, expects software industry sales to expand 5 percent to 10 percent annually after the recession ends, Liddell said in the July 27 interview. That compares with Microsoft’s 18 percent sales growth in 2008. The company also faces a new challenge from Google Inc. and Apple Inc., forcing it to keep spending on new product development.”

“Managers wanting to hire workers will need to balance them against cuts in other areas, and the company will trim spending on travel and company parties,” Bass reports. “Microsoft may relocate some customer support to countries with cheaper labor.”

Bass reports, “Microsoft’s revenue plummeted 17 percent last quarter, missing the average estimate of analysts in a Bloomberg survey by more than $1 billion. Sales fell across all of the company’s product lines. In the Windows division, which accounts for about a quarter of sales, revenue dropped 29 percent. Sales in the business division, comprised mainly of the Office software, fell 13 percent.”

Bass reports, “So far, the cost cuts haven’t kept up with the revenue declines. Operating margins will probably continue to narrow for the next two quarters because Microsoft can’t pare research and marketing spending to match revenue losses, Liddell said on a conference call with analysts last week.”

Full article here.

MacDailyNews Take: As if buying Apple’s latest software or hardware product, taking it apart, and then putting it back together ass-backwards while jumping around screaming about “innovation” is so expensive.

[Thanks to MacDailyNews Reader “Kevin P.” for the heads up.]


  1. “The company also faces a new challenge from Google Inc. and Apple Inc., forcing it to keep spending on new product development.””

    ‘new product development’….hmmmmmmmmm

    new, stronger chairs that last longer?

  2. If this was really true, the Zune would have been cancelled immediately as a hopeless cause. And there would be no talk of the even more hopeless Microsoft retail stores. So I think it is business as usual, at least for a few more years.

  3. “…forcing it to keep spending on new product development”

    Wow. What a totally new concept.
    Say it isn’t so. A company can’t rest on its laurels and earn the monopoly-pension ad-infinitum?
    So sad…

  4. If there are areas a company can save money in, they should have done it *before* the trouble came. Desperation means one thing: moving from half-and-half to non-dairy creamer in the break room. Do they realize how much half-and-half they could buy if they hadn’t started the Zune project???

    Seriously though, desperation leads to stupid decisions that just make employees and customers mad or resentful, instead of cutting Zune, Xbox, and other money-losers with a level head.

  5. Balmer is a fat slob and a sweathog lardass supreme.

    He needs to carry that lard can down to the gym, but he is too busy making losing deal, building shit products and delivering customer hostile solutions to burn off some of that ass fat he has.

  6. Keep chasing those declining revenues with additional cost cuts, Ballmer. Eventually the profits will disappear entirely.

    Nothing wrong with being frugal, but people only seem to care when things are looking bad.

  7. Bafoons!!!! Haha. Opening up retail stores is not trimming the fat? The stupid “I wanna be like Apple” stores is a pure waste of company resources. Wow, these guys are truly stupid.

  8. I’m waiting for the video from a future conference of a sweating Ballmer prancing across the stage shouting “innovation, innovation, innovation, innovation…. innovation, innovation, innovation, innovation”.

    Oh, and those developers of old? They’re probably programming for the iPhone.

  9. Actually most of Microsoft’s actions are quite reasonable, if you assume that their goal is to damage the fortunes of other companies so they cannot compete with Microsoft. I doubt Microsoft expects their retail stores to make any money. If they blunt the effect of the Apple stores by confusing people, Microsoft will believe that they have accomplished their goal.

  10. My Suggestion:

    Liquidate the company and seize all assets from Bill Gates of Hell and reimburse all people that have suffered countless hours of agony trying to make the CRAP work that they produced.

    There wouldn’t be enough money to go around, but it be a start.

  11. missed the best quote from the article on Microsoft: “I’m seeing them discontinue products, which is something they’ve never done before,” said Walter Price, managing director at RCM Capital Management in San Francisco.

  12. Apple is enticing MS to punch itself out, just as Muhammad Ali did with George Foreman in Zaire. MS’s stores are not going to work, because the motivation behind them is not to provide better products or service but to hurt Apple. They’ve been throwing their punches for quite some time, and Apple has ducked and weaved and taken a few body blows. But MS is beginning to suck wind, and Apple is about to lay some serious hurt on them.

    MS’s only reason to exist is to make money. They care not one whit about making the sorts of products and services people want and enjoy. They care only about the mighty dollar. It is certainly apropos that a ‘sales guy’ is at the helm of MS as it sails farther through the dark night in search of icebergs.

    Yeah, I know I’m mixing metaphors….

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