Microsoft net income falls 11 percent, cuts 5000 jobs

Microsoft announced fiscal second-quarter earnings of $4.17 billion, or 47 cents per share, on a revenue of $16.6 billion. Revenue was up 2 percent year-over-year but net income dropped 11 percent.

Wall Street analysts cited by AP were expecting earnings of 49 cents per share on sales of $17.08 billion. The software giant says it's hit by the slowing global economy and lower client revenue, resulting from lower demand for PCs and a shift to netbooks.

Microsoft said it will cut 5,000 jobs over the next 18 months, starting immediately by slashing 1,400 jobs. The job cuts will reduce operating costs by $1.5 billion.

Due to market volatility, Microsoft says it's unable to offer profit and revenue guidance for the rest of the year.

Microsoft's shares have dropped 8.54 percent to $17.74 at 10:00AM EST.