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Microsoft plans 5,000 job cuts as its profits fall

By Eric Lai, Jeremy Kirk and Peter Sayer
January 26, 2009 12:00 PM ET

Computerworld - Microsoft Corp. last week announced that it will eliminate 5,000 jobs because IT spending in the most recent quarter didn't meet projections.

At the same time, the company reported that its profits for its second fiscal quarter, which ended Dec. 31, fell 11%, to $4.17 billion, from the same quarter a year earlier. But its revenue rose 2% to $16.6 billion.

About 1,400 workers were laid off immediately, with the remainder to be dismissed over the next 18 months. Posts will be eliminated in IT, R&D, marketing and other departments, Microsoft said.

CEO Steve Ballmer said the layoffs came because Microsoft's "cost base has grown significantly." He noted that new jobs created over the next 18 months will keep the overall head-count reduction to 2,000 to 3,000.

This version of the story originally appeared in Computerworld's print edition.

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