Software giant Microsoft slashes 5,000 jobs

Software giant Microsoft is to axe 5,000 jobs worldwide over the next 18 months, with 1,400 jobs to go immediately.

Following the news, shares in the company plunged 7.9% as it also announced a net profit of $4.17 billion (£3 billion) for the final quarter of 2008, 11% down compared with the same period the previous year.

The company said that jobs will go from almost all departments, including research and development, marketing, sales, finance, legal, human resources and information technology.

Around 60 jobs are at risk in the UK from a workforce of nearly 3,000.

Microsoft chief executive Steve Ballmer told the BBC that while the company is not immune to the effects of the economy, he is confident in the strength of our product portfolio and soundness of our approach.

Meanwhile, an analyst at Cross Research, times are clearly changing since Microsoft has never had this scale of job losses.

In related news, chipmaker Intel is experiencing a slump in computer sales and is therefore closing five facilities in the US and Asia resulting in over 5,000 job losses.

Intel recently announced a 90% fall in profits for the fourth quarter of 2008.

Meanwhile, one of Intel’s smaller competitors, Taiwan Semiconductor Manufacturing, also reported a slump in demand and announced a 64% fall in quarterly profits.

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