BUSINESS BRIEFS
Microsoft to cut 5,000 jobs as profit drops 11%
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SEATTLE — Microsoft Corp. will make the first mass layoffs in its 34-year history, cutting 5,000 jobs as demand for personal computers falls and even one of the world's richest companies gets burned by the recession.
The company announced the cuts yesterday as it reported an 11 percent drop in second-quarter profit, short of Wall Street's expectations. Microsoft shares plunged more than 11 percent.
"We're certainly in the midst of a once-in-a-lifetime set of economic conditions," Chief Executive Steve Ballmer said during a conference call. With less access to credit, businesses and consumers are spending less and stretching the life span of their existing computers.
The cuts appeared to reflect uncertainty about when times will get better. The company said it could not issue a forecast for earnings and profits for the rest of the year.
Microsoft, which has $20.7 billion in cash on hand, said its business prospects were hurt by the deteriorating global economy and lower revenue from software for PCs.
JOBLESS, BUILDING DATA WORSENING
WASHINGTON — The number of newly laid-off Americans filing jobless claims and the pace of home construction both posted worse-than-expected results in government data released yesterday, lending urgency to the economic recovery plan President Obama and Congress are scrambling to advance.The latest batch of economic news cemented fears that the recession, already in its second year, will drag on through much of 2009.
DESPITE PROFIT SLIP, GOOGLE DOING OK
SAN FRANCISCO — Google Inc.'s profit slipped for the first time in the fourth quarter, but the Internet search leader is still weathering the economic storm better than analysts anticipated.The results released yesterday indicated the company was able to rein in its spending enough to offset a slowdown in the online ad market that generates most of Google's revenue.
SOUTHWEST POSTS 4TH-QUARTER LOSS
DALLAS — Southwest Airlines Co. said yesterday that it lost money in the fourth quarter of last year as its fuel-hedging strategy, brilliant when oil prices were rising, lost punch with tumbling energy prices.It was Southwest's second straight losing quarter after a string of profitable quarters that reached back to early 1991.
Southwest lost $56 million, or 8 cents per share, in the fourth quarter, compared with a gain of $111 million, or 15 cents per share, a year earlier.
