Updated Jul. 17, 2014 at 9:22 a.m.

Microsoft to lay off up to 18,000 workers over the next year

Published: 2014-07-17 08:21:00
Updated: 2014-07-17 09:22:17

Microsoft (Nasdaq: MSFT) which has a large software-related operation in Charlotte, is going to cut its work force by as many as18,000 in coming months, the tech giant said Thursday.

This would be the largest round of cuts in the company's history.

Microsoft described the cuts as "a restructuring plan to simplify its organization and align the recently acquired Nokia Devices and Services business with the company’s overall strategy."

Inside Microsoft layoffs:

"These steps will result in the elimination of up to 18,000 positions over the next year," the statement from Microsoft said. "Of the total, about 12,500 professional and factory positions will be eliminated through synergies and strategic alignment of the Nokia Devices and Services business acquired by Microsoft on April 25," Microsoft said in a statement.

"The actions associated with the plan are expected to be substantially complete by Dec. 31, 2014, and fully completed by June 30, 2015.

"The company expects to incur pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters, including $750 million to $800 million for severance and related benefit costs, and $350 million to $800 million of asset-related charges."

Earlier this week, Bloomberg news reported that Microsoft was planning its "biggest round of job cuts in five years."

The news sent shares up 3 percent in premarket trading.

It's the boldest move by CEO Satya Nadella since he took the reins from Steve Ballmer in February. In a public email to employees on Thursday, he said the changes were needed "become more agile and move faster."

Microsoft has been shifting its focus from traditional PC software to cloud computing and cloud-based products like its Office 365 productivity software.

In a blog posting a week ago, Nadella hinted at the move, saying Microsoft had to "change and evolve" its culture for the "mobile-first and cloud-first world."

Nadella said Thursday he would give more details when Redmond, Wash.-based Microsoft reports fiscal 2014 results on Tuesday.

Shares of Microsoft rose $1.35, or 3.1 percent, to $45.43 in premarket trading. The stock is up nearly 18 percent since the beginning of the year.

In 2009, Microsoft slashed 5,800 jobs - the previous largest number of cuts, according to Bloomberg.

The company has some 127,000 employees. 

(The Associated Press contributed to this report.)



WRAL TechWire any time: Twitter, Facebook

Copyright 2014 WRAL TechWire. All rights reserved.
Editor's Blog

Editor's Blog

The latest blog posts from our WRAL TechWire and WRAL editors. Read more articles…

page 1
sort order: oldest first | newest first
"oh, thank you for 20 years of work and dedication. We hope you can find a job in the future as a dishwasher or grounds keeper. What? All those jobs that Americans won't do are taken by criminal illegal immigrants? So sorry, the door is down the hall and to the back, please don't let anyone see you leave."
Great. Firing almost 15% of it's employees and the stock only goes up 3%? Or was this decision factored into the stock going up 18% this year. Is this a great country or what! Cut a large enough portion of you work force to make headlines (or move jobs overseas, which is more likely) and your stock price zooms. Looks like they are following the IBM model.
Just another good Capitalist - I mean American company. Nokia may provide even more opportunity to keep profits off shore and avoid more taxes! Thanks Microsoft!
page 1
sort order: oldest first | newest first

Please Log In to add a comment.

Best of TechWire Insider

Techwire Inside Partners


Dr. Mike Walden
Tech economy
Vivek Wadhwa
Frank Vinluan
Life science