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Fri 23 Jan 2009 04:47 PM

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Microsoft to cut 5,000 jobs

Five thousand jobs to go as Microsoft sees falling sales of Windows operating system

Microsoft has announced that it will cut up to 5,000 jobs, after posting a drop in net income of 11%, to $4.17 billion, for its second quarter to end of December.

The company blamed poor market conditions for the poor results, especially in the PC sector, and a shift towards netbooks. Revenue from sales of the Windows operating system dropped 8% to $3.98 billion.

The jobs will be cut from R&D, marketing, sales, finance, legal, HR, and IT, according to a company statement, with 1,400 jobs going immediately, and the rest over the next eighteen months.

Steve Ballmer, CEO of Microsoft said: “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. 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 aims to cut $1.6 billion from annual operating expenses from the cuts. Most of the cuts will be made to headcount at Microsoft headquarters in Redmond. The company has around 96,000 employees worldwide.

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Hussain M 11 years ago

Microsoft really did to itself by overpricing its operating system software. I personally now have my OEM windows XP on one of mymachines, however the rest of my computers are running Linux UBUNTU, very user friendly, free, and thanks to a plugin named wine...windows software compatible OS. Also microsoft aimed too high with vista when they set out its requirement, why would i need a DirectX 10 card to run an OS...games...3DS and Archicad i get but an OS, plus multiple issues still plague vista's performance as OEM on notebooks. I would not pay 1000 Riyals to go buy MS office when i can download Openoffice for windows free of charge. microsoft needs to reconsider their whole pricing system in order to get business going again.