Microsoft is trimming a considerable amount of fat from the company by getting rid of 18,000 positions in what is the largest cull in the firm’s history and three times more than earlier estimates.
The recently acquired Nokia unit will feel the brunt of the jobs cuts [12,500] that represent around 14 per cent of Microsoft’s total workforce and it’s part of a plan to cut as much as $600 million [£350.8 million] per year in costs within 18 months of closing the acquisition.
It was expected that the firm would cut just 6,000 of its 127,000 strong workforce and it’s currently unclear how many of the firm’s 3,500 UK jobs are under threat as a result of the cuts.
Microsoft estimates that the job cuts will cost between $1.1 billion [£643 million] and $1.6 billion [£935 million] over the coming 12 months and much of that will be spent on severance pay.
The plan is to inform most of the departing staff members over the next six months and the cull is expected to be “fully completed” by June next year with CEO Satya Nadella admitting in an email that “making these decisions to change are difficult, but necessary”.
Whilst most of the cuts will be at Nokia, it’s rumoured that its Xbox game and entertainment arm is also vulnerable as Nadella doesn’t consider it one of Microsoft’s core elements.
Nadella’s head-ship has so far seen a drastic change in the way the firm works and the latest news follows the company being rebranded just last week as “the productivity and platform company for the mobile-first and cloud-first world”. The last time that Microsoft made wide ranging changes to the workforce was back in 2009 the then CEO Steve Ballmer wielded the axe to 5,800 jobs