Microsoft on Thursday announced it will cut up to 18,000 jobs over the next 12 months, a majority of them from its newly acquired Nokia Devices and Services unit.
This is the largest retrenchment in the company’s history, accounting for nearly 15% of its total staff strength of 127,104 people worldwide — around 6,500 in India.
Microsoft is letting go over 40% of the 30,000 employees that came on its roll with the Nokia acquisition earlier tis year — then CEO Steve Ballmer’s last large buy.
Microsoft refused to say home many of these cuts will take place in India, where it employs around 5,000 people. “We can’t share market specific numbers right now (because of differing policies internationally in disclosing staffing changes),” it said.
In a note to Microsoft employees, CEO Satya Nadella put the cuts in the context of his larger “strategic direction as a productivity and platform company”.
“The first step to building the right organization for our ambitions is to realign our workforce,” he said, adding, “It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas.”
The mail, headlined, “Starting to Evolve Our Organization and Culture” spoke of changes going beyond the cuts — “flattening organizations and increasing the span of control of people managers”.
“In addition,” he added, “our business processes and support models will be more lean and efficient with greater trust between teams.”
Because of the cuts, Microsoft expects to incur pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters, including $750 million to $800 million for severance.