Microsoft today announced its second quarter earnings for the period ended December 31, 2008, revealing total sales of $16.63 billion (up two percent) and net income of $4.17 billion (an 11 percent decline). "In light of the further deterioration of global economic conditions," the company said it intends to slash its workforce by 5,000 over the next 18 months. 1,400 jobs were already eliminated today.

"While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach," said Steve Ballmer, chief executive officer at Microsoft. "We will continue to manage expenses and invest in long-term opportunities to deliver value to customers and shareholders, and we will emerge an even stronger industry leader than we are today."

Microsoft's Entertainment and Devices Division (EDD), which houses the Xbox business, saw it sales rise three percent to $3.18 billion as the company sold through a record six million Xbox 360s. Operating income slid 60 percent to $151 million, but at least the games business remains profitable (unlike at Sony). EDD was negatively affected by the Zune platform revenues falling by $100 million, but this was countered by the Xbox 360 platform and PC game revenue, which increased $135 million (up six percent).

Looking at the first six months of Microsoft's fiscal 2009, 8.3 million Xbox 360s were shipped, which is up from 6.1 million one year ago. Xbox 360 platform and PC game revenue decreased $196 million (five percent) "primarily as a result of the $330 million of incremental revenue from the launch of Halo 3 in the first quarter of fiscal year 2008 and decreased revenue per Xbox 360 console as a result of price reductions during the past 12 months."