Microsoft plans to wring out a cost saving of $400m to $500m(£248m to £309.6m) this fiscal year and next by reviewing its hiring plans and theamount spent on marketing.
This was part of the software kingpin’s strategy to weatherwhat is reckons will be either a mild decline in economic activity – a bestcase scenario – or a full blown, deep recession.
The strategy was outlined as Microsoft unveiled first fiscalquarter results for the three months ended 30 September that showed a 9% climbin revenues to $15bn and a rise in profits to $4.37bn.
The results included 2% growth in sales for the Clientdivision to $4.2bn, while Server and Tools revenues grew 17.2% to $3.4bn andthe Business Division rose 20.2% to $4.9bn.
The market had clearly weakened in September, said Microsoftchief financial officer Chris Liddell.
“The credit crisis unfolded and many partners and customerswere faced with market uncertainty and credit restrictions which impacted therate at which they buy software,” he said.
This continued in October and while the Government hasstepped in to “unfreeze the financial markets there will inevitably be somespill over into the real economy,” Liddell added.
While Microsoft said while it could not control the economyit could manage operating expenses, including “lower headcount related costs aswe’ve reviewed our spending plans and are making adjustments to our headcountgrowth.”
Marketing budget will also be lowered to reflect theeconomy, though the vendor was not more specific about the impact on partners’MDF.
It expects the results of these actions to bear fruit laterthis fiscal year and into the next but Liddell said “if macroeconomicconditions worsen we’ll endeavour to reduce our operating expensesaccordingly.”