Following a slump in earnings due to the current financial climate, Microsoft has announced that it is to slash up to 5,000 jobs worldwide over the next 18 months.

Chief financial officer at Microsoft Chris Liddell said that spending by IT support executives across the world in the current economic downturn had contributed to the expectations of the firm during the quarter, although the company has mitigated the impact of the problems.

"We are planning for economic uncertainty to continue through the remainder of the fiscal year, almost certainly leading to lower revenue and earnings for the second half relative to the previous year."

He added that in the current environment, Microsoft will focus on outperforming competitors as well as addressing its cost structure.

The company, which was widely believed to be recession-proof, still continues to earn in excess of $4.2 billion (£3 billion) but has seen profit drops going into the double digits when compared with the previous year's takings.

According to a recent survey by Connect, the two biggest IT headaches for businesses were 'everyday hassles with IT' (37 per cent) and 'security concerns' (32 per cent).