Microsoft will cut 18,000 jobs this year with the bulk of those positions coming from the strategic realignment of its newly acquired Nokia phone business, CEO Satya Nadella announced Thursday in an employee email
“The first step to building the right organization for our ambitions is to realign our workforce,” Nadella’s email said, explaining that 12,500 jobs will come from both professional and factory workers in the Nokia Devices and Services area. “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.”
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These cuts are the most the company has ever made in its workforce in its 39-year history, and are being well-received by analysts and brokers on Wall Street.
"This is about double what the Street was expecting," Daniel Ives, an analyst at FBR Capital Markets, told Reuters
. "Nadella is clearing the decks for the new fiscal year. He is cleaning up part of the mess that (former CEO Steve) Ballmer left."
Microsoft shares increased 1.7 percent on the news, Reuters said, hitting $44.84, the highest they’d been since 2000.
In the employee email, Nadella said the company will offer severance to all employees who are let go, along with options to move to jobs in other locations. He also said senior leadership team members would offer more information to employees on what they can expect.
“Our workforce reductions are mainly driven by two outcomes: work simplification as well as Nokia Devices and Services integration synergies and strategic alignment,” Nadella said in the email. “First, we will simplify the way we work to drive greater accountability, become more agile and move faster. Second, we are working to integrate the Nokia Devices and Services teams into Microsoft.”
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