Microsoft has announced that it will lay off up to 18,000 workers in the next year, in what is by far the largest number of employees that will be cut by the company in its history.
In a letter sent to employees earlier this morning that Microsoft also released to the public, company CEO Satya Nadella confirmed that 12,500 of the job losses will be due to the company's acquisition of Nokia's Devices and Services division in April, when it added 25,000 new workers.
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. It's important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas. My promise to you is that we will go through this process in the most thoughtful and transparent way possible. We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company.
In addition to the job cuts associated with the Nokia deal, Nadella also indicated that Microsoft will "have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making." More information on these decisions will likely be revealed on July 22, when Microsoft announces its latest quarterly financial results.
This decision to cut 18,000 positions dwarfs the 5,800 job cuts that Microsoft announced in 2009, at the height of the worldwide economic recession which happened at that time. In a separate press release, Microsoft said that it expects to incur pre-tax charges that will total between $1.1 billion to $1.6 billion over the next year. Those charges will include "$750 million to $800 million for severance and related benefit costs, and $350 million to $800 million of asset-related charges."
What do you think of this move by Nadella and Microsoft to eliminate so many positions in the company?