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Microsoft to cut up to 18,000 jobs over the next year

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Microsoft will cut up to 18,000 jobs – about 14% of its staff – over the next year as it integrates its recently purchased Nokia mobile unit and reduces levels of management, CEO Satya Nadella said in en email to staff made public Thursday.

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Some 12,500 professional and factory jobs are expected to be cut in the company's biggest round of layoffs in its 39-year-long history.

It’s the boldest move yet by CEO Satya Nadella since he took the reins from Steve Ballmer in February.

"We will simplify the way we work to drive greater accountability, become more agile and move faster," Nadella wrote to employees in a memo made public on Thursday. "We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision-making."

Microsoft expects charges of $1.1 billion to $1.6 billion over the next four quarters, which includes $750 million to $800 million for severance benefits and related costs.

Microsoft has been shifting its focus from traditional PC software to cloud computing and cloud-based products like its Office 365 productivity software.

In a blog posting a week ago, Nadella hinted at the move, saying Microsoft had to “change and evolve” its culture for the “mobile-first and cloud-first world”.

Nadella said Thursday he would give more details when Redmond-based Microsoft reports its fiscal 2014 results next Tuesday.

The bold cuts were welcomed by Wall Street, which viewed Microsoft as bloated under previous CEO Ballmer. The company topped 127,000 employees after absorbing the Nokia mobile devices division in April.

Shares of Microsoft rose $1.35, or 3.1 percent, to $45.43 in premarket trading on the news. The stock is up nearly 18 percent since the beginning of the year.

(FRANCE 24 with AP)

 

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