Microsoft is cutting 18,000 jobs, the company’s CEO Satya
Nadella has told employees in an email memo.
Currently the company boasts 127,104 members of staff, meaning
the cuts will equal approximately 14 percent of Microsoft’s
workforce. The layoffs will account for the largest job losses in
the company’s history. The last time Microsoft cut a significant
number of jobs was in 2009, when the company laid off around 5
percent of employees as the financial crisis was at its peak.
The job cuts have been rumoured for several days and to some
extent have been on the cards since Microsoft acquired Finnish
handset manufacturer Nokia earlier this year, at which point it
gained an extra 30,000 members of staff. Nokia will bear the brunt
of the cuts, with 12,500 of job losses occurring from the company’s
workforce — that’s over 40 percent of the employees Nokia Devices
carried over in the acquisition.
The first 13,000 positions that will be cut are already being
considered, and Nadella says that employees should expect to hear
about these over the next six months.
“My promise to you is that we will go through this process in
the most thoughtful and transparent way possible,” he writes in the
memo — published
in full by Business Insider — before promising that
all employees will be offered severance and job transition
Microsoft will announce its quarterly financial results on 22
July, at which point Nadella says he will focus on the company’s
investment strategy going forward. He has already given some idea
of what we can expect though, particularly with regards to Nokia’s
integration into the company.
In order to win over the higher smartphone price tiers, he says
more focus will be put on “breakthrough innovation that expresses
and enlivens Microsoft’s digital work and digital life experiences”
— the implication being that Nokia currently isn’t serving the top
end of the market well enough.
Select Nokia X product designs will become Lumia products
running Windows. “This builds on our success in the affordable
smartphone space and aligns with our focus on Windows Universal
Apps,” he says. This seems puzzling given that Nokia has only very
recently committed to producing Android phones.
Nadella’s full memo to Microsoft staff can be read over on