Microsoft Will Cut 18,000 Jobs By March 31, 2015

by Mike Futter on Jul 17, 2014 at 02:33 AM

Microsoft CEO Satya Nadella has announced to employees plans to cut 18,000 jobs this year. The first 13,000 cuts will come in the next six months, with 12,500 coming from the newly acquired Nokia Devices and Services operations.

Microsoft’s plans across the company are to reduce management layers, including what Nadella calls “sideways.” We take this to mean that there will be operational mergers streamlined under fewer managers.

“My promise to you is that we will go through this process in the most thoughtful and transparent way possible,” Nadella writes. “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.”

The news comes days after reports that Microsoft would begin engaging in its largest staff reduction since 2009. Microsoft says that the cuts will be largely complete by the end of this calendar year and entirely wrapped up by the end of the current fiscal year on March 31, 2015.

[Source: Microsoft (1), (2)]


Our Take
Microsoft has great need to streamline operations after its staff rolls swelled by 33 percent with the Nokia acquisition. It makes sense that the majority of cuts will come first from divisions directly impacted by the operational merger.

This doesn’t mean that employees in other divisions (like Xbox, productivity, and cloud) aren’t going to be impacted. Those reductions would come at a later date and likely be less severe.