Jobless claims soar again, Microsoft feels the sting

The number of new unemployment claims jumped even more than expected last week, matching a 26-year high set just four weeks ago as 589,000 Americans sought extended benefits in the week ending January 17.  The last time claims were higher was November 1982. In recent weeks, several states have experienced a crush of applications, and the backlog of piled up claims could partially account for the increase.

However, the layoffs have kept on coming as well. In one of the more shocking job cut announcements of the deepening recession, Microsoft Corp. said Thursday  that it plans to cut up to 5,000 jobs over the next 18 months, including 1,400 immediately. With profits slipping and the personal computer market weakened, the Redmond, Washington-based software giant had been the subject of speculation last week, and will aim to reduce operating costs by $1.5 billion in preparation for lower revenue and earnings in the second half of this year.

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--Posted by Steven Schiff, Vault News & Commentary