Are Microsoft cuts once in a lifetime?

To anyone who's been following Microsoft for any length of time, hearing the software behemoth admitting that it's even affected by wider economic con

To anyone who's been following Microsoft for any length of time, hearing the software behemoth admitting that it's even affected by wider economic conditions might come as a shock.

The Redmond Borg announced yesterday that is shedding 5000 jobs over the next 18 months, and freezing pay for the rest of its employees, in reaction to what CEO Steve Ballmer calls a 'once in a lifetime' crisis.

Looked at more rationally, though, Ballmer's response to the economic downturn seems to encapsulate Microsoft's bullish - even arrogant - corporate philosophy.

In reality, Microsoft will continue to hire in some divisions (including internet search. Really? Give it up, guys!), giving a net loss of as few as 2000 jobs. That represents just over 2 per cent of the company's 96,000 employee's worldwide.

Workers will continue to receive stock awards and bonuses (totalling over $1.5 billion in 2007), and enjoy free fresh-ground coffee, fizzy drinks and often Microsoft buses to and from work.

Many analysts think Ballmer's cost-cutting didn't go anywhere near far enough - and sure enough Microsoft's shares plunged 12 per cent on the news.

People I know who work on the Redmond campus were bracing themselves for 10,000+ job cuts, especially given the flattening off in demand for Microsoft's key desktop PC operating systems.

Something tells me that Ballmer's 'once in a lifetime' reference may come back to bite him - and sooner than anyone thinks.