Verticals/The Boardroom

Ouch - Microsoft is cutting 18,000 jobs

The Boardroom Joe Curtis

13:24, July 17 2014


Satya: Welcome to the team, Nokia – goodbye 12,500 of you.

Thousands of Nokia and Microsoft staff are set to lose their jobs in the biggest cuts in Redmond's history.

CEO Satya Nadella today revealed 18,000 staff will be axed in the next year, including 12,500 Nokia professionals and factory workers following the acquisition of the phone manufacturer earlier this year .

A total of 32,000 Nokia staff were expected to join Microsoft as part of the acquisition.

The first 13,000 workers to get the chop will be told in the next six months, said Nadella.

In a letter to staff this morning he wrote: "Our workforce reductions are mainly driven by two outcomes: work simplification as well as Nokia Devices and Services integration synergies and strategic alignment.

"We will simplify the way we work to drive greater accountability, become more agile and move faster. Making these decisions to change are difficult, but necessary."

While he promised staff would be treated with respect, he didn't promise much more, though he said severance packages would be offered as well as job relocation.

Nadella also outlined plans to cut management layers as he tries to make Redmond's business processes leaner, hoping the job losses will leave Microsoft teams more productive as a result.

The boss also reiterated that Nokia X products would be swallowed up by the Lumia line, as Redmond moves to a mobile-first, cloud-first strategy.

"To win in the higher price tiers, we will focus on breakthrough innovation that expresses and enlivens Microsoft's digital work and digital life experiences," he wrote. "In addition, we plan to shift select Nokia X product designs to become Lumia products running Windows. This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps."

The news comes after his open letter to staff (and media) last week, in which he described Microsoft's new direction.

In it, he said: "Culture change means we will do things differently. Often people think that means everyone other than them. In reality, it means all of us taking a new approach and working together to make Microsoft better."

Maybe 'all of us' doesn't quite mean 'all of us' anymore.

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