Microsoft braces for tough times

The world’s biggest software producer says economic conditions will be rough through at least the next 12 months, and plays down claims it will move into the mobile handset market.

Microsoft chief executive Steve Ballmer told The Age that the current economic downturn can be described as “an economic re-set.”

“You don’t beat it, you manage in this environment,” he said. “You think of it as a re-set that might take several years to really re-set, and then we need to really think about ‘what do we invest in?’

“You’ve got to ask ‘what is the business re-set that goes with the economic reset?'”

Microsoft has cut already cut 5.5% of its workforce totalling 5000 jobs, while Ballmer admits its web-browsing software Internet Explorer is losing market share. He also claimed the company will not move into the mobile handset hardware market, but will continue to develop software for mobile devices.

He says the company will try and improve its web search market share, of which it currently holds 4% – Google accounts for 63% of the market.

Microsoft stocks dropped 0.23% to $US17.17 on Tuesday.