Microsoft Announces the Largest Layoff in Company History

Jul 17, 2014  •  Post A Comment

Microsoft today announced a massive round of layoffs. Reuters reports that the layoff, related to the recent acquisition of the Nokia phone business, will eliminate as many as 18,000 jobs, slashing 14% of the Microsoft workforce and cutting the size of the Nokia team almost in half.

"The larger-than-expected cuts, announced on Thursday, are the deepest in the company's 39-year history and come five months into the tenure of Chief Executive Officer Satya Nadella. He outlined plans for a 'leaner' business in a public memo to employees last week," Reuters reports.

In the memo, Nadella writes: "We will simplify the way we work to drive greater accountability, become more agile and move faster. We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making."

Nadella reportedly will detail the plan following the company's July 22 quarterly report.

"About 12,500 of the layoffs will come from eliminating overlaps with the Nokia unit, which Microsoft acquired in April for $7.2 billion, with the bulk of the cuts coming from Nokia itself. The acquisition of Nokia's handset business in April added 25,000 people to Microsoft's payroll," Reuters reports, adding: "The first wave of layoffs include 1,351 jobs in the Seattle area, Microsoft said."

The report notes: "The size of the cuts [was] welcomed by Wall Street, which viewed Microsoft as bloated under previous CEO Steve Ballmer, topping 127,000 in headcount after absorbing Nokia earlier this year."

Daniel Ives, an analyst with FBR Capital Markets, is quoted saying: "This is about double what the Street was expecting. Nadella is clearing the decks for the new fiscal year. He is cleaning up part of the mess that Ballmer left."

This morning's Reuters report adds: "Microsoft shares jumped 1.7 percent to $44.84 on Nasdaq, reaching their highest since the technology stock boom of 2000."

satya nadella, microsoft CEO.jpgSatya Nadella

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