5% really isn't that many. Sounds like a good excuse to cut the chafe.
Within MS, the uncertainty will be detrimental to the entire culture there until all they layoffs are done and probably for quite awhile after that.
Outside MS seeing the largest company in town, one that rarely lays people off, axe so many jobs will have everyone nervous. No matter what your feelings about MS are, their influence in Seattle (not to mention elsewhere) is huge and a layoff of this size means a lot.
Headlines often do this. When it's a big actual number and a small percent they post the actual number. When it's a big percent, but a small actual number, they post the percent. It's one thing if they're cutting tens of thousands of jobs and 20% of their work force. But most big corporations are so inefficient, this feels like a natural layoff/reduce the chafe move. We'll find out soon enough.
* South Lake Union: http://seattlepi.nwsource.com/business/395046_msftofficespac...
* Eastside: http://seattle.bizjournals.com/seattle/stories/2009/01/19/da...
...the glut will be even more pronounced. Good for growing companies that might want to increase their Class A space; much stronger negotiation leverage.