News Column

Microsoft to lay off 18,000 in historic downsizing

July 17, 2014

ArabianBusiness.com Staff



Microsoft Corp announced plans today to axe up to 18,000 jobs by the end of the year, amounting to 14% of its workforce, as the company restructures a range of business functions following its $7.2bn acquisition of Nokia's smartphone business, Reuters reported.

The figure is more than three times that of the greatest-ever cuts made by the Redmond-based software giant. Under former CEO Steve Ballmer, 5,800 layoffs were made at the height of the global recession in 2009.

Current chief executive Satya Nadella, in a memo to employees last week, stressed the need for refined focus and efficiency at the company. Bloomberg subsequently cited insiders saying job cuts were inevitable and could top the 2009 figure. Earlier today Reuters reported the figure could exceed 6,000.

When it completed its acquisition of Nokia's devices unit, Microsoft inherited 25,000 Nokia employees, many of whom performed functions that overlapped with existing Microsoft roles. Some 12,500 of the job cuts will be designed to eliminate those overlaps, but it is not clear how many of those will be from ex-Nokia personnel and how many from legacy Microsoft positions.

The first wave of layoffs will be 1,351 jobs in the Seattle area. According to Finnish media, 1,000 of Microsoft's cuts will be in Finland, at a time when the Scandinavian country's economy is shrinking.

Outside of its Nokia inheritance, Microsoft may also trim fat in its Xbox division and marketing and engineering functions. Nadella has previously indicated that he considers dedicated software testers redundant in the age of cloud computing.

No mention was made of Middle East layoffs. Microsoft'sDubai-based devices unit could not be reached for comment.


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Source: ITP.net (United Arab Emirates)


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