Microsoft cuts 5,000 jobs

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Microsoft has said it will slash 5,000 jobs, as the economy situation across the world continues to falter.

The software giant said the job cuts will be across R&D and IT, in addition to its marketing, sales, finance, legal and HR departments. Some 1,400 will be cut immediately, with the rest to follow in the next 18 months. Microsoft said its cost savings plans, including the cuts, would save the company some $1.5 billion (£1 billion) in annual operating expenses.

The cuts came as Microsoft announced its quarterly results, posting a two per cent increase in revenue from the same quarter last year to $16.63 billion. Net profit fell 11 per cent from the same period last year to $4.17 billion (£3 billion).

Client-related revenue fell eight per cent, which Microsoft blamed on a weak PC market and increasing popularity of cheap netbooks. It saw growth of 15 per cent in servers, and three per cent in entertainment and devices, however.

“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, Microsoft's chief executive.

Because of the market’s instability, Microsoft said it could not offer a revenue outlook for the rest of the year. “We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year,” said Chris Liddell, the company's chief financial officer.

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