Restructuring Plan Will Cut up to 18,000 Jobs, Microsoft Announces
By Casey Leins
July 17, 2014 | 1:54 p.m. EDT
Microsoft announced Thursday it will cut up to 18,000 jobs over the next year, the bulk of which will come from the Nokia groups it recently acquired.
The company is prepared to pay severance and layoff costs of between $1.1 billion to $1.6 billion in the largest restructuring plan in its 39-year history, said The New York Times.
[READ: Microsoft to Eliminate Up to 18,000 Jobs]
The plan, which Microsoft CEO Satya Nadella shared with employees via email, is set to be “fully completed” by the end of next June. The job eliminations, he said, are part or an effort to restructure the organization in order to achieve work simplification and to integrate Nokia’s mobile business into the company.
Microsoft’s Nokia divisions, which it acquired for $7 billion in late April, are expected to lose 12,500 employees, Nadella said. He added that the company is working on making the first 13,000 eliminations, but the “vast majority” of affected employees will be notified over the next six months.
He assured workers, however, that “we will go through this process in the most thoughtful and transparent way possible,” including offering severance and job transition tools to those who are cut.
Nadella told employees that he will share specifics on where the company is focusing its innovation investments during a public earnings call on July 22.
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His bold actions far surpass previous layoff plans, the largest of which affected 5,800 people during the recession in 2009. Nadella’s strategy will eliminate almost 15 percent of its 125,000 person workforce, the Times reported.
Nadella replaced Steven Ballmer as Microsoft CEO in February after working as executive vice president of Microsoft’s Cloud and Enterprise group, according to USA Today.
“Nadella is using today as an opportunity to make sure that Microsoft is ready and well positioned to embark on its next chapter of growth around mobile and cloud,” Daniel Ives, analyst with FBR Capital Markets, said. http://www.usnews.com/news/newsgram/articles/2014/07/17/restructuring-plan-will-cut-up-to-18-000-jobs-microsoft-announces?int=9f7209