Microsoft to cut up to 18000 jobs, many from Nokia

SEATTLE - Microsoft said Thursday that it plans to eliminate up to 18,000 jobs over the next year in a shakeup intended to help the company move more quickly in the market.

The cuts are the largest in the company's 39-year history, representing about 14 percent of its workforce.

Microsoft will make the deepest cuts to the businesses it acquired from the Finnish phone maker Nokia. About 12,500 of the jobs being eliminated will come from the Nokia groups or from overlap at Microsoft resulting from the deal. Microsoft said 1,100 job cuts would come from Finland and 1,800 would come from a Nokia factory in Hungary.

That is about half the number of employees who joined Microsoft from Nokia a few months ago when Microsoft completed its acquisition of Nokia's mobile business.

Microsoft said it would take a charge of $1.1 billion to $1.6 billion to cover severance and related costs from the layoffs over the next year.

On Thursday, Satya Nadella, the company's CEO, said in an email to employees announcing the job cuts that the layoffs are an effort to become more agile, a message he has repeatedly conveyed since he took the job in February.

'Having a clear focus is the start of the journey, not the end,' he said in the email. 'The more difficult steps are creating the organization and culture to bring our ambitions to life.'

He added: 'The first step to building the right organization for our ambitions is to realign our workforce.'

The huge job cuts in the businesses it acquired from Nokia raise questions about Microsoft's plans in the market for mobile devices. The acquisition, initiated by Steve Ballmer, Microsoft's previous CEO, greatly increased the company's presence in the hardware business, which is outside its traditional expertise. The deal has been unpopular with investors and many people inside Microsoft.

Microsoft was often criticized for being unfocused during Ballmer's tenure, as well as for having a swelling product line and layers of bureaucracy.

'Under the Ballmer era, there were many layers of management and a plethora of expensive initiatives being funded that has thus hurt the strategic and financial position the company is in, especially in light of digesting the Nokia acquisition,' said Daniel Ives, an analyst at FBR Capital Markets, who called the cuts necessary.

Microsoft to cut up to 18,000 jobs, many from Nokia 07/17/14

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