Microsoft to Lay Off 18,000 Workers, Largest Cuts in History

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Over the next year, Microsoft is eliminating 18,000 jobs, or as much as 14 percent of its workforce. CEO Satya Nadella plans to integrate Nokia’s mobile phone business and shift away personal computer software.

Nadella wrote a public email to company employees on Thursday saying “every team across Microsoft must find ways to simplify and move faster, more efficiently.” He said that he would give more details on Tuesday, when Microsoft reports its fiscal 2014 results.

Around half of the number of employees added under Microsoft’s Nokia acquisition in April (or 12,500 of 25,000 total) will be included in the cuts. Microsoft’s cuts are expected in the sales, marketing and engineering departments.

The company is trying to make good on its promise to save $600 million in annually with the Nokia deal. It is also trying to streamline management, realign the workforce and compete with mobile and Internet-based services and software.

An analyst at FBR Capital Markets & Co. Daniel Ives wrote in response to Thursday’s email by Nadella, “Microsoft needs to be a leaner tech giant over the coming years in order to strike the right balance of growth and profitability around its cloud and mobile endeavors.”

Ives said the cuts were about double the amount of what Wall Street was expecting.

Starting today, the company will eliminate 13,000 jobs; the remaining workers will be notified over the next six months with a completion date expected by June 30, 2015.

At the time of this writing, Microsoft stock was up 1.4 percent.

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