• Silicon Alley Insider, Thursday, January 22, 2009 11:15 AM

The Microsoft layoff rumors turned out to be true, after all. The company surprised investors this morning with an early earnings announcement, in which the software giant said it was eliminating 5,000 positions, including 1,400 today.

The cuts, to be completed over 18 months, will come across all divisions, including "R&D, marketing, sales, finance, legal, HR, and IT." Microsoft said the cuts would save about $1.5 billion a year.

Microsoft also missed its fourth quarter earnings. Revenue came in at $16.63 billion, versus $17.08 expected. Earnings-per-share was $0.47 a share, missing expectations of $0.49. Silicon Alley Insider points out that client revenue fell 9% on weak PC demand, while the Entertainment division, thanks to a strong holiday showing by the Xbox 360, grew 3%.

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