Microsoft cuts 5,000 jobs, cautiously optimistic

True to the rumors, Microsoft just announced a plan to reduce 5,000 positions from its ranks--its first job cut in its history. This comes on the heels of posting $4.17 billion for its second quarter earnings report, which is below Wall Street expectations. As its shares fall 8.5 percent following its profit announcement, the Redmond-based company has declined to offer profit forecasts for the rest of the fiscal year, citing the volatile market conditions.

According to The Register, the positions to be eliminated will come from its research and development, marketing, sales, finance, legal, human resources and IT units. It will take place over the next 18 months--or until 2010--with 1,400 staffers leaving immediately. Current speculation is that the reductions are coming from loss-making divisions for online services business.

Taken into perspective however, the 5,000 positions represent a mere five percent of Microsoft's workforce, which has ballooned to about 91,000 worldwide. This represents an increase in payroll by 50 percent in just four years as it aggressively pumped money into new markets. 

Microsoft head honcho Steve Ballmer is cautiously optimistic. He was reported to say, "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."

For more on this story:
- check out this article from The Register

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