Financial News

  • 20 July 2014, 14:29

Microsoft Cuts 18,000 Jobs In Nokia Cull

Microsoft has confirmed plans to "eliminate" up to 18,000 jobs worldwide as part of efforts to simplify the company's operations and cut costs.

The announcement was made in an email to staff entitled 'Starting to Evolve Our Organization and Culture' by new chief executive Satya Nadella, who is moving to reshape Microsoft into a cloud-computing and mobile-friendly software company.

The $7.2bn (£4.2bn) purchase of Nokia's mobile division - which is being integrated into Microsoft - was to account for the majority of the losses, Mr Nadella said, as overlaps were identified.

The deal, completed in April, added 28,000 positions to Microsoft's payroll.

The company, which now employs 127,104 people globally, has 3,500 staff in the UK but no announcement was made on exactly where the cuts would be made, apart from identifying 1,300 losses in Seattle.

It estimated costs of up to $1.6bn (£1bn) initially before any savings would be felt.

Mr Nadella told staff: "The first step to building the right organisation for our ambitions is to realign our workforce.

"With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year.

"Of that total, our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers.

"We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months.

"It's important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas.

"My promise to you is that we will go through this process in the most thoughtful and transparent way possible.

"We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company."

Microsoft's share price rose more than 1% in pre-market trading after news of the plan was confirmed.

The shake-up was seen as central to the company's shift from being software-focused to one that sells online services, apps and devices it hopes will make people and businesses more productive - challenging the dominance of firms like Samsung, Apple and Google.

Advertisement