Microsoft announced on Thursday that it plans to cut 18,000 employees over the next year, according to USA Today. The cuts are part of new CEO Satya Nadella’s plans to streamline the company’s business.
Nadella sent a memo to the company’s employees that said the following, according to Microsoft:
“The first step to building the right organization 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.”
A statement from the company said that 12,500 professional and factory jobs will be cut as part of the $7.2 billion acquisition of Nokia.
Nadella took over for Steve Ballmer back in February. He said the majority of the employees who will be affected by the cuts will be told within the next six months. They will be paid a severance and offered job transition help. All of the job cuts will be made by next June.
These will be the largest layoffs ever by the company, which employs some 125,000 people. When the company acquired Nokia in April it added 25,000 employees to the company’s payroll.
In the memo to employees, Nadella wrote, “Microsoft has a unique ability to harmonize the world’s devices, apps, docs, data and social networks in digital work and life experiences so that people are at the center and are empowered to do more and achieve more with what is becoming an increasingly scarce commodity — time!”
S&P Capital IQ analyst Scott Kessler said the following about Nadella:
“He has injected a new sense of focus, energy and interest in what’s going on at Microsoft. He’s doing things the way he thinks they should be done. If it means they’re going to do a partnership with a former — and you could argue current — rival in Apple for the betterment of the business, then he’s going to do it.”
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