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Even the mighty Microsoft is struggling

Microsoft has today released third-quarter results for 2008 which show an 11% fall in profits to $4.17 billion. The figure was well below analyst expectations and was accompanied by a cull of 5000 jobs which is to hit the company over the next 18 months. It would appear that even the mighty Microsoft is struggling as the worldwide economy continues to fall and technology spending heads downwards.

Interestingly the company is cutting many of the 5000 jobs from its research and development operations as it looks to save $1.5 billion a year. There are concerns that the short-term reduction in research and development staff will affect the long-term outlook for the company in a market which is getting more and more competitive. It looks as though 2009 could be a vital year for the company with the release of Windows 7 which many believe holds the key to the future of the company.

The fall in profits at Microsoft has impacted the overall technology sector where investor confidence had already been brittle and there were concerns about the future. As a consequence of today's announcement the shares are down to around $18 which is their lowest level since 1998.

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