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Microsoft to axe 18 000 jobs

Article By: ,  Financial Analyst
July 17, 2014 4:15 PM

Microsoft is to cut up to 18,000 jobs over the next year, marking the deepest cuts in the technology firm's history.

In an open letter to staff published today (July 17th), the firm said the bulk of the cuts (around 12,500) will be in its phone unit Nokia, which Microsoft bought in April 2014.

New chief executive officer Satya Nadella wants the firm to shift its focus away from software to online services, apps and devices.

"Making these decisions to change are difficult, but necessary," he wrote in the open letter.

"My promise to you is that we will go through this process in the most thoughtful and transparent way possible," he added.

The firm said it also planned to have fewer layers of management "to accelerate the flow of information and decision making."

Microsoft said staff affected by the job cuts would be notified over the next six months, and they would be "fully completed" by the the end of June next year.

In total it said the cuts, including severance pay, would cost it between $1.1 billion to $1.6 billion (£643 million to £935 million) over the next year.

The cuts are aimed at helping Microsoft better compete with rivals including Google and Apple, the BBC reports.

The last significant job cuts at the firm were in early 2009, when previous chief executive Steve Ballmer axed 5,800 staff.

More details about the company’s realignment are expected Thursday afternoon and during a public earnings call on July 22nd.

Microsoft Corp's shares rose 2.9 per cent to $45.35 at 08:40 ET in early trading in New York. 

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