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Microsoft cutting 18,000 jobs

Layoff plan includes 12,500 cuts from Nokia, fewer layers of management; "limited" impact on Xbox hardware

Microsoft today announced plans to cut 18,000 jobs in the next year. In a publicly released memo to all employees titled "Starting to Evolve Our Organization and Culture," CEO Satya Nadella laid out the main parts of the company's plan.

First, the layoffs will come primarily from the Nokia Devices and Services business, which Microsoft acquired last year for $7.2 billion. Nadella said the division would account for about 12,500 of the lost jobs. All of the cuts are expected to be made in the next year, with "the vast majority" happening within six months.

"It's important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas," Nadella said. "My promise to you is that we will go through this process in the most thoughtful and transparent way possible."

The job cuts happening outside of Nokia are being made with an eye toward work simplification, Nadella said.

"[W]e will simplify the way we work to drive greater accountability, become more agile and move faster," Nadella said. "As part of modernizing our engineering processes the expectations we have from each of our disciplines will change. In addition, we plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers."

Nadella's memo didn't mention the Xbox business, and the company's gaming business may emerge from the cuts relatively unscathed. In a separate email to employees, Microsoft Devices Group head Stephen Elop talked mostly about how the Nokia integration would impact his team's focus, but briefly addressed concerns about how these cuts would impact the rest of the group's work.

"With a set of changes already implemented earlier this year in these teams, this means there will be limited change for the Surface, Xbox hardware, PPI/meetings or next generation teams," Elop said.

As of last month, Microsoft's worldwide headcount stood at just over 127,000.

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Latest comments (9)

Bonnie Patterson Narrative Designer, Writer 7 years ago
Ouch - my condolences and best wishes to anyone caught in the layoffs.
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Kingman Cheng Illustrator and Animator 7 years ago
Holy heck, best of luck for the future to every single one of you!
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Diana Hsu Product Manager, Free-to-Play, Big Fish Games7 years ago
Wow, 18,000 people -- this is going to have a huge impact on the Seattle tech scene. Condolences to everyone affected.
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Show all comments (9)
Nick Wofford Hobbyist 7 years ago
And 40% of Nokia just got cut. Man, hopefully that company got some warning to the staff. Layoffs are unfortunate, and sometimes unavoidable, but surprise layoffs are worse and entirely avoidable. Best wishes to the staff.
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Paul Jace Merchandiser 7 years ago
This was expected with the huge amount of employees they picked up from Nokia last year. Hopefully everyone affected can get back on their feet as soon as possible.
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Adam Campbell Product Manager, Azoomee7 years ago
Whilst I'm not surprised (Nokia Acquisition) this is really unfortunate. Hopefully the ladies and gents involved will find something soon.
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Peter Dwyer Games Designer/Developer 7 years ago
Ok very surprised by that 18,000 number. How many people did Nokia employ because, unless I'm missing something, I don't see how such huge cuts leave any meat on the bone to handle innovation and R and D!
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Adam Campbell Product Manager, Azoomee7 years ago
@Peter Well, I was shocked when Nokia cut 1,800 from Symbian so I'm guessing there's an awful lot.

Edited 1 times. Last edit by Adam Campbell on 18th July 2014 6:04pm

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Paul Shirley Programmers 7 years ago
@Pete Dwyer: Nokia got itself into the mess by running too many OS & product developments in parallel but failing to deliver any of them on time and in most cases failing to finish them at all. Nokia weren't very good at delivering on R&D investment in software and a WinPhone only company has rather less need for those staff. If anything the numbers are lower than I expected, probably because so many Nokia employees quit when Elop started preparing the company for acquisition by Microsoft.
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