Microsoft tackles weaker economy with cost reductions

Microsoft’s chief financial officer Chris Liddell has unveiled a three-pronged plan to help Microsoft deal with the current economic crisis. The software giant wants, among other things, to save 500 million dollars in costs.

Microsoft wants to lower the TCO for its customers, lower its own costs and invest cautiously. “We can’t control the economy, but we can control our performance in it.” thus Liddell.

Microsoft expects to attract customers by pointing out cost savings that can be achieved with its Hyper-V virtualization software and with its Office Communication Server. In addition, Microsoft plans to reduce its own spending by $500 million for the remaining fiscal year, which ends June 30, 2009. The software giant also wants to save costs by adjusting its personnel policy; for example, there will be cuts in travel expenses and Microsoft will spend less money on marketing activities.

Liddell declined to comment on the possibility that Microsoft will make another takeover bid for Yahoo. Earlier this month, Microsoft CEO Ballmer was still drop out that an acquisition of Yahoo by Microsoft still makes sense for the shareholders of both companies. But in this economic climate and with Microsoft tightening its belts, a Yahoo takeover now seems further away than ever.