“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 $1 billion. Sales fell across all of the company’s product lines. In the Windows division, which accounts for about a quarter of sales, revenue dropped 29 percent. Sales in the business division, comprised mainly of the Office software, fell 13 percent.”
Bass reports, “So far, the cost cuts haven’t kept up with the revenue declines. Operating margins will probably continue to narrow for the next two quarters because Microsoft can’t pare research and marketing spending to match revenue losses, Liddell said on a conference call with analysts last week.”
Full article here.
MacDailyNews Take: As if buying Apple’s latest software or hardware product, taking it apart, and then putting it back together ass-backwards while jumping around screaming about “innovation” is so expensive.
[Thanks to MacDailyNews Reader “Kevin P.” for the heads up.]
They are desperate.
If sales people lack the kind of creativity needed to keep a company growing, accountants even more so. I recall one CEO warning never to put an accountant in charge because the only thing accountants know to do to make a company more profitable is cut costs. With such a mindset, evidently, this M$ CFO’s cost-cutting efforts are stymied by the spending that, darn it, is necessary to keep improving products.
Where Are you zune tongue! You can surely add some drivel to this article too. I am gonna miss you.
@UniqueVisitor,
You nailed it. The CFO at our small non-profit is a real dufus who can’t see the big picture even when we give him paint-by-numbers.
“Microsoft may relocate some customer support to countries with cheaper labor.”
What a great idea! So calling Microsoft to resolve a problem with Office will get you the same wonderful “customer support” you receive from HP when you have to call them for a printer problem.
@Arnold… much as like the analogy, that’s an insult to Big George, who was a great boxer, businessman, a great procreator (!) and, from all accounts, quite a nice guy…
>He became the oldest man ever to ever become heavyweight boxing champion of the world when, at age 45, he knocked out Michael Moorer, to reclaim the title he held 20 years earlier. He has been named one of the 25 greatest fighters of all time by Ring magazine. Nicknamed “Big George,” he is now a successful businessman and an ordained Christian minister who has his own church.
Foreman has 10 children, and each of his five sons are named George: George Jr., George III, George IV, George V, and George VI. His three older sons are distinguished from one another by the nicknames “Monk”, “Big Wheel” and “Little George.”
Foreman is ranked #9 on Ring magazine’s list of “100 greatest punchers of all time”.
johnhook asks …
“Is it ass-backwards or bass-ackwards?”
Yes, Ballmer’s head and ass are interchangeable
BC
Why don´t they start using Linux and OpenOffice for internal use… Would be a lot cheaper and a pain reliever.
They Could still use Mac´s and iPhones for VP´s and Directors.
Diet? Good news for “Stiff Ballmer”!
“Microsoft may relocate some customer support to countries with cheaper labor.”
Anyone who has called MS support has to wonder where this mythical country is
BluMeNe
If can get ’em to quit playin’ around in the water
Probably find some really cheap labor in Somalia, yea ?
BC
Microsoft is taking the same actions as GM and Circuit City, where did that get them. The “fat” is usually the older workers who earn more money than newer ones, but also know what the hell they are doing. Apple did this in the early 90’s and almost drove them bankrupt. People want to buy products from companies that have positive news, not ones that are in financial trouble. “Right sizing” only helps the books for a short term; long term it guts the brain power of the organization. MS’s old guard probably won’t teach the new kids how to work the Xerox on their way out the door.