NEW YORK (Bloomberg) — Microsoft Corp. chief financial officer Chris Liddell said "the worst is behind" and signalled the company expects software demand to recover next year.

The company sees "a lot more optimism" going into 2010, Liddell said at a Citigroup Inc. event in New York yesterday. The rest of 2009 will continue to be "tough", he said.

Microsoft made its first company-wide job cuts this year as businesses and consumers curbed software spending amid the recession. Microsoft's revenue plummeted 17 percent last quarter, with sales falling across all of its product lines. The company also faces challenges from Google Inc. and Apple Inc.

Microsoft won't raise salaries this year, Liddell said. He said he sees little changes to the company's headcount. Microsoft plans to do small acquisitions, and investors should expect stock buybacks, he said.

Microsoft, the world's biggest software maker, fell four cents to $24.78 yesterday on the Nasdaq Stock Market. The stock has gained 27 percent this year.