Microsoft CFO Chris Liddell says customers have slowed buying
The software giant’s financial forecast for the December quarter and first half of 2009 assumes a recession in the U.S. economy, cutting demand for technology products, Chief Financial Officer Chris Liddell said Thursday.
The worst case scenario anticipates “a deeper recession in the economy and lower growth in IT,” Liddell said on a conference call discussing first, or September, quarter results.
With the gyrations of the financial markets in September, Microsoft’s customers slowed purchases. “We’ve seen this behavior continue in October,” Liddell told analysts. “There will inevitably be some spillover into the real economy.
“All of our customers are going to be looking for ways to cut costs,” he added later on the call. “I’m just generally more cautious.”
Microsoft will respond to the likely recession by reducing hiring. Last year, head count rose 15 percent, a pace that will not be maintained, said Liddell.
Microsoft also will cut spending, including its plans for capital spending to build data centers. Capex should now come in at $3.7 billion instead of $4 billion for the fiscal year. Expenses also will be trimmed in slower growing areas of the company.
Almost everyone below the “medium” class are in hard life now. Let us always pray for the best, prepare for the worst.