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Speaking to financial analysts on the heels of Microsoft’s announcement of layoffs and a disappointing second quarter, CEO Steve Ballmer referred to current economic conditions as an entire recalibration that means the economy likely won’t return to its previous prosperity.

Ballmer also predicted it could take a year or two for the economy to improve, and that Microsoft is prepared to keep its priorities tight and its costs conservative for the long term.  Microsoft announced its fiscal 2009 second-quarter earnings before markets opened on Thursday instead of waiting for markets to close, as the company typically does. In addition to a quarter in which net income fell 11 percent year-over-year, the company also announced it would lay off 5,000 employees.

President Barack Obama will keep his beloved BlackBerry, White House Press Secretary Robert Gibbs said on Thursday. Obama has often been seen using his BlackBerry and has professed his attachment to it.

But the technology community has wondered if he would continue using the device once he became president since it is not rated for the highest security standards approved by the government. Gibbs would not say who exactly has been approved to communicate with Obama via his BlackBerry, but he said it was a small group of people. He also did not elaborate on the type of security enhancements added to the device.

Advanced Micro Devices reported a steep loss and declining revenue for its fourth quarter as the chipmaker continued to suffer amid the faltering economy. AMD reported a loss of US$1.42 billion for the quarter ended Dec. 27, an improvement on its loss of $1.77 billion a year earlier.  The loss included a goodwill impairment charge of $684 million related to AMD’s acquisition of ATI Technologies in 2006. The results follow AMD’s announcement that it will cut 1,100 more jobs and lower its workers’ salaries to reduce costs. The job cuts follow about 2,100 layoffs that AMD announced last year.

Intel has asked for a meeting with AMD  to discuss how its formation of The Foundry Co. may affect long-standing cross-licensing agreements between the two companies. AMD said the questions raised by Intel won’t affect the formation of the new company, and one analyst said Intel may simply be maneuvering for a better negotiating position.

While they compete fiercely in the chip market, Intel and AMD also have licensing agreements related to x86 processors that allow them to use certain technologies without fear of being sued by each other. AMD is splitting itself into two companies by spinning off its debt-laden manufacturing business. AMD will continue to design and sell its chips, while The Foundry Co. will manufacture them. It will be majority-owned by an Abu Dhabi investment firm, and AMD will hold 34 percent.

…And those are the top stories from the IDG Global IT News Update, brought to you by the IDG News Service. I’m Sumner Lemon in Singapore. Join us again later for more news from the world of technology.

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