Microsoft to lay off up to 18,000 workers over the next year
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Research Triangle Park, N.C. — 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.)
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