Intel-Microsft to shed thousands

Microsoft has announced that it is to cut its global workforce by 5,000. The company has seen an 11% drop in profit in the last quarter of 2008, and its shares fell 10% in US trading yesterday. For the first time in its history, the company is making forced redundancies.

1400 jobs will go immediately, with the balance over the next 18 months, although it appears that no hiring freeze has been announced.

Steve Ballmer, Microsoft's chief executive, sounded more like a Treasury Secretary than the real one when he said: "We're certainly in the midst of a once-in-a-lifetime set of economic conditions. The perspective I would bring is not one of recession. Rather, the economy is resetting to lower level of business and consumer spending based largely on the reduced leverage in economy."

What that means is that people are not borrowing money to buy Microsoft product - and the company depends on people being sucked into "upgrading" to the latest issue of its dominant operating systems and office suites.

Microsoft's unofficial partner in world domination, Intel Corp. announced more bad news for the Malaysian tech sector when it said that it intended to close plants across South East Asia. In fact, the plants it will close are in Malaysia and The Philippines. This year, in those two countries and the US, some 6,000 posts will go although not all staff will lose their jobs entirely.

Penang's Chief Minister, Lim Guan Eng, said that employees at the Penang Intel factory would be moved to other plants under a consolidation plan. Intel said that the closures would largely be in relation to end-of-life technology and that new tech plants are not affected.

Howerver, workers are not convinced: Penang is Malaysia's only majority-Chinese state and as workers break up today for the Chinese New Year holiday, there is general doom and gloom.