Tech giant Microsoft is expected to announce more than 6,000 job cuts early on 17 July with the recently-acquired Nokia handset division set to take the hardest hit, according to media reports.
This would be the biggest layoff by the company in its 39-year history.
The job cuts come as Microsoft looks to integrate the Nokia phone business and put more focus on cloud computing and mobile software. A majority of the cuts are expected to come from the Nokia unit, which Microsoft acquired in April for $7.2bn.
According to Microsoft’s latest headcount, the company employs more than 127,000 workers worldwide, a figure that includes 30,000 employees from its acquisition of Nokia’s hardware division. Roughly half of that total (61,000 people) are employed in the United States. More than 43,000 are based in Microsoft’s home state of Washington.
Layoffs may strike some developers as the company’s leadership strives to streamline its software engineering practices. In a lengthy July 10 memo to employees, CEO Satya Nadella said that big changes are under way. Nadella took over as Microsoft’s chief executive on Feb. 4, following Steve Ballmer’s 14-year run as the head of the company.
“You can expect to have fewer processes but more focused and measurable outcomes,” he stated, before hinting that the company’s org chart may soon be pruned. “You will see fewer people get involved in decisions and more emphasis on accountability.”
Nadella also signaled that the effects of the restructuring will be felt companywide. Every team across the massive organization “must find ways to simplify and move faster, more efficiently,” he said. “We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes.”
Further, Nadella revealed that he “asked each member of the Senior Leadership Team to evaluate opportunities to advance their innovation processes and simplify their operations and how they work.” The company plans to share more details on the process throughout July.
The cuts will impact software testers and the marketing departments of multiple business units, including the global Xbox team, according to the Bloomberg report. Microsoft’s Xbox division, however, will remain a part of the company, said Nadella in his memo, countering persistent rumblings that the video game and entertainment unit was being put on the auction block. Other drastic changes remain possibilities, however.
“Nothing is off the table” as Microsoft pursues a fundamental shift in culture, wrote Nadella in his memo. “Tired traditions will be questioned. Our priorities will be adjusted. … Processes will be simplified,” he said.