Microsoft may cut as many as 18,000 jobs in the next year, CEO Satya Nadella announced today in an email to employees.
According to the CEO, the majority of the cuts will affect the Nokia Devices and Services division, which Microsoft acquired in September 2013.
“The first step to building the right organization for our ambitions is to realign our workforce,” Nadella wrote. “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.”
While some jobs will be eliminated, the restructure will create other jobs, the CEO said. Microsoft plans to offer severance packages and help with job transitions where possible.
Nadella said the changes are designed to “simplify the way we work to drive greater accountability” and allow Microsoft to be more agile. The changes, which includes some organizational flattening, will eliminate management layers and foster greater teamwork, according to the CEO.
Nadella was named Microsoft CEO in February, and this is his second companywide email in the last week. In a July 10 document, Nadella outlined a new strategic vision for the company, in which Xbox plays a major role.
“We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation,” he wrote last week. “Microsoft will continue to vigorously innovate and delight gamers with Xbox. Xbox is one of the most-revered consumer brands, with a growing online community and service, and a raving fan base.”
Nadella said he’ll release more information “on where we are focusing our innovation investments” July 22 during a Microsoft earnings call.
Written by Dave Tach on July 17, 2014 for Polygon