Microsoft plans new round of job cuts

Software maker's redundancies expected to be its biggest cull of staff since 2009

PUBLISHED : Wednesday, 16 July, 2014, 1:15am
UPDATED : Wednesday, 16 July, 2014, 1:15am

Microsoft is planning its biggest round of job cuts in five years, as the software maker looks to slim down and integrate Nokia's handset unit, people with knowledge of the company's plans said.

The reductions, which may be unveiled as soon as this week, will probably be in areas such as Nokia and the parts of Microsoft that overlap with that business, as well as marketing and engineering, said the people. The restructuring may end up being the biggest in Microsoft history, topping the 5,800 jobs which the firm cut in 2009, two of the people said. Some details are still being worked out.

The announcement would come one week after chief executive Satya Nadella issued his first company mission statement, calling for greater emphasis on mobile devices, cloud-computing and productivity software. In the July 10 memo, which also called for the company to become more focused and efficient, Nadella, who took over from Steve Ballmer in February, said he would provide more specifics on implementation later this month.

A Microsoft spokesman declined to comment.

Some of the job cuts will be in marketing departments for businesses such as the global Xbox team, said the people. The European Xbox team is based in Britain.

The company had 127,104 employees as of June 5, after adding about 30,000 in its acquisition of Nokia's handset unit.

When Microsoft agreed to acquire Nokia's mobile-phone business in September, the software maker pledged to make US$600 million in annual cost savings in the 18 months after the deal closes.

Microsoft is the latest technology company seeking to reduce costs by trimming jobs. Hewlett-Packard in May announced more cuts after an 11th-straight quarter of declining sales. Chief executive Meg Whitman has said she will eliminate as many as 16,000 jobs on top of the 34,000 which have already been cut.