Microsoft is expected to cut thousands of jobs in possibly its worst-ever round of layoffs to meet Chief Executive Satya Nadella’s goal of increasing productivity.
Sources told Bloomberg’s Dina Bass that the job cuts could come as soon as this week, across the Nokia handset unit and Microsoft’s marketing and engineering departments, including the global Xbox team. The layoffs could be worse than the 5,800 jobs cut in 2009, which was the biggest in Microsoft history, the report said. As of June 5, Microsoft had 127,104 employees in total.
This doesn’t come as a surprise, as Nadella hinted at this in his long memo sent to his employees last week that serious restructuring would come soon. He wrote, “On July 22, we’ll announce our earnings results for the past quarter and I’ll say more then on what we are doing in FY15 to focus on our core. Over the course of July, the Senior Leadership Team and I will share more on the engineering and organisation changes we believe are needed.”
When Microsoft agreed to buy Nokia’s handset business last year, it said it would cut costs by $US600 million within 18 months of closing the deal. The $US7.2 billion deal, involving the addition of Nokia’s 25,000 employees, closed in April. It was reported that most of the cost savings would likely come through job cuts in areas where Microsoft and Nokia overlap.
Meanwhile, in a separate report, Nomura Securities analyst Rick Sherlund wrote, Microsoft could layoff as much as 10 per cent of its workforce.
Speculation over layoffs have been running wild for weeks now at Microsoft, and it seems like it’s just a matter of time before we see big changes occur at the software company.