Microsoft to have biggest layoffs in history
SAN FRANCISCO
US tech giant Microsoft has announced that it will have a workforce cut of 18,000 over the next year to simplify business and align the Nokia handset business.
The layoffs, which account for over 14 per cent of Microsoft's global workforce, will be the largest in the company's 39-year history. Five years ago, only 5, 800 jobs were eliminated.
Microsoft Chief Executive Satya Nadella said in an email to employees that about 12,500 jobs of the total reductions comes from the synergies and strategic alignment on Nokia Devices and Services.
FIRST PHASE
The services were acquired in April for $7.2 billion.
The first phase affecting 13,000 positions has started and the reduction plan is expected to be fully completed by June 30, 2015.
Mr Nadella said the workforce reductions are mainly driven by the outcome of work simplification and Nokia handset business integration synergies and alignment.
Microsoft is working to streamline its business process and management to accelerate the flow of information and decision making and make teams more productive and impactful.
"The first step to building the right organisation for our ambitions is to realign our workforce," Mr Nadella said.
SAVE COSTS
The fact that the majority of layoffs are from where Microsoft mobile unit and Nokia handset business overlap is within the expectations of analysts.
Microsoft's Nokia deal added 25,000 workers to its workforce and it has already promised to save costs of $600 million per year following the deal.
Mr Nadella, who took office in February, has described his vision to reinvent Microsoft as "the productivity and platform company for the mobile-first and cloud-first world."
With the announcement, he attempts at simplifying Microsoft's infrastructure and making it ready to produce next round of growth on mobile and cloud computing, analysts said.
