Microsoft is announcing its biggest ever job cuts today, affecting 18,000 employees. In a memo, Microsoft CEO Satya Nadella says the company will cut 18,000 positions in the next year, with former Nokia employees expected to account for around 12,500 jobs. "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," says Nadella. Microsoft currently had 127,104 employees as of June 5th, so the cuts mean a reduction of around 14 percent of the company's workforce.
While the number is significant, it's not surprising Microsoft is focusing its cuts on Nokia staff. The software maker pledged $600 million in annual cost savings within 18 months of completing the acquisition. Regardless, the 18,000 job cuts are the biggest reductions ever for Microsoft, topping the 5,800 headcount reduction from 2009. "Our workforce reductions are mainly driven by two outcomes: work simplification as well as Nokia Devices and Services integration synergies and strategic alignment," says Nadella. Microsoft now plans to share further details about its "innovation investments" in its July 22nd earnings call.
Nadella moves to kill Nokia X Android phones
Nadella is also offering up some hints at where Microsoft is heading with its Nokia acquisition today. "We plan to shift select Nokia X product designs to become Lumia products running Windows," he says in his memo, meaning that Microsoft's Android phones are being killed off. "This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps."
The cuts follow a recent memo from Microsoft CEO Satya Nadella, outlining a big shakeup for the software maker and plans to reshape the core of what Microsoft is. Nadella also dropped the devices and services moniker, opting for a focus on cloud and mobile for the future of Microsoft. In an interview with The Verge, Nadella talked about a need to increase Microsoft’s tablet share, and he also explained why he believes Google and Apple haven’t won yet. "I absolutely believe that in a world where there are going to be many screen sizes, and ecosystems across all of those screen sizes, and cloud services that'll be available on all ecosystems, that's what Microsoft's future is."