Microsoft vows to get leaner and meaner

SEATTLE: Microsoft Corp, coping with its first annual sales drop, will make frugality a new way of life, Chief Financial Officer Chris Liddell said.

"This is not a crash diet where you stop eating for a couple of quarters - this is a new diet regime where you slim down and stay slim," Liddell, 51, said in an interview at Microsoft's headquarters in Redmond, Washington. "It's actually about dialing up the importance of costs."

Microsoft, which slashed $3 billion in operating expenses and cut about 5,000 jobs this year, expects software industry sales to expand 5 percent to 10 percent annually after the recession ends, Liddell said in the July 27 interview. That compares with Microsoft's 18 percent sales growth in 2008. The company also faces a new challenge from Google Inc and Apple Inc, forcing it to keep spending on new product development.