When Microsoft posts its quarterly profit on Thursday, it is expected that it will have missed the company's own target for the quarter, prompting speculation that the company could soon announce thousands of job cuts.Microsoft forecast a profit of 51 cents to 53 cents a share for the quarter, however analysts reckon that the actual profit for the quarter ending December 31 will be just 49 cents a share. According to estimates from Reuters, quarterly revenue is expected to be $17.1 billion, lower than Microsoft's target of $17.3 billion to $17.8 billion, as the company faces reduced demand in many of its key markets, such as new PCs, business software and video games.
Analysts expect Microsoft will announce job cuts to reduce costs, following in the steps of many other technology firms such as AMD, Sony and Sun Microsystems.
McAdams Wright Ragen analyst Sid Parakh said, "Checks indicate that Microsoft is likely to engage in headcount reductions to the tune of 6,000 to 8,000 employees or 6 percent to 8 percent of its 95,000 workforce. Our checks also revealed some speculation over the potential for a second round of cuts in some groups sometime later in the year."
Other analysts reckon that the cost reductions could occur over a longer period of time, with more targeted cutbacks instead of a large lay-off.
What do these companies do with all that money?
Shareholders demand performance year on year, and i'm sure that getting rid of employees would not be happening if everyone was doing their job properly, and profitably. We don't know the extent of any job losses (as there are only rumours at this time), but its fair to assume staff that will go will be staff that are duplicating roles, or working in none profit making departments.
Unlike banks MS is still making huge profits, but to keep this sustainable (unlike banks!!) it has to protect its interests fully and make moves that are likely unpopular. The market is hugely unstable at the moment, and to have any hope in the future of re-recruiting from the many that are loosing their jobs in the current climate, big companies have to trim some of the flab off now so they can survive to that point. As the climate settles, the flab will re-aquire, and in 20 years we'll go through the whole process again.
Shareholders demand performance year on year, and i'm sure that getting rid of employees would not be happening if everyone was doing their job properly, and profitably. We don't know the extent of any job losses (as there are only rumours at this time), but its fair to assume staff that will go will be staff that are duplicating roles, or working in none profit making departments.
Unlike banks MS is still making huge profits, but to keep this sustainable (unlike banks!!) it has to protect its interests fully and make moves that are likely unpopular. The market is hugely unstable at the moment, and to have any hope in the future of re-recruiting from the many that are loosing their jobs in the current climate, big companies have to trim some of the flab off now so they can survive to that point. As the climate settles, the flab will re-aquire, and in 20 years we'll go through the whole process again.
That 0.02 cent profit per share loss means that 2 million dollars of investor dividend has been lost.
You have to also remember that microsoft's share price has dropped almost 10 dollars in the last few months.
For a company with 90million shareholders, 4 months ago it had 125 million sharehoulders, thats almost 900 million - 1 billion dollars of investor money lost.
Shareholders, will of course, not be happy with that and demand results.
Microsoft have issued 8,895,570,000 shares, so i'm not sure how you get a 2 million dollar loss of dividend based on 2 cents per share.
Microsoft have issued 8,895,570,000 shares, so i'm not sure how you get a 2 million dollar loss of dividend based on 2 cents per share.
Oops, yes i meant 0.02 dollars
MSFT Share Volume: 68,292,071
Dropped 12-20 overnight =/
How about "Micosot expected to miss"?
Also - a company that is still able to turn 8 bils in profit in this stage I'd think is admirable from investment point of view...
Did Microsoft lost money with this earnings speculated?
I mean there's so much speculation about cuts in jobs at Microsoft, but half a year ago they had 40 Billion $ to offer for yahoo..
I just don't get what's wrong with Microsoft, that so many people think and speak it's like they are going bankruptcy..
It is not money "lost." It is money "not made" (as computed on a per-share basis). It simply means that major companies did NOT upgrade to Windows Vista or consumers did NOT buy as many Zunes or 360's as one would have anticipated 3-6 months ago.
Nobody is panicking except for those who MIGHT lose a job. Then again, some of them are not helping Microsoft make any money!
Microsoft shares have done nothing for 7 years, and like all stocks, have tanked in the last year. Their paltry profit of 50 cents on (declining) shares, costing $18 does not look great to me (or the market!
Heres hoping they don't have to lay off the staff but or at least not in the quantities that some articles have predicted. I don't think we need more people losing their jobs currently.
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