Microsoft surprised the street today by releasing its earnings early, and they weren’t pretty. The software giant’s revenues inched up only 2%, below earlier guidance, and its net income dropped 11%. More alarming, the company said it was slashing 5,000 jobs, starting with 1,400 today, which amounts to 5.5% of its workforce. “We are not immune to the effects of the economy,” said Steve Ballmer.
The company’s finance officer said it was expecting the economy to continue declining, “almost certainly leading to lower revenue and earnings for the second half.” Microsoft expects the cuts to save it $1.5 billion annually. It’ll also cut other costs, including salaries, travel, and marketing. Microsoft shares tumbled 7.8% in early trading.