About 13,000 positions will be cut in the next six months, largely from the recently-acquired Nokia Devices and Services.
Microsoft CEO Satya Nadella announced major downsizing in an email sent to Microsoft employees early this morning. Rumors about the scope of the announcement have been circulating since Nadella alluded to big changes in a company-wide memo last week. Microsoft's workforce will be reduced by up to 18,000 jobs, with more than half coming from Nokia Devices and Services. Microsoft acquired Nokia's Devices and Services division, and its 25,000 employees, in a $7.2 billion deal in April.
"[W]ork toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers," says Nadella. "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." The cuts are driven by Microsoft's shifting focus away from devices and a push to simplify their work. Part of the cuts will flatten Microsoft's organizational structure, reducing the number of managers.
The job cuts announced today are the largest in Microsoft's history. The last major round of layoffs was in 2009, when Steve Ballmer let go 5,800 employees. Mergers between technology companies often go hand in hand with layoffs. When Google acquired Motorola in 2011, around 6,000 employees were let go. Google later sold Motorola to Lenovo.
Microsoft's Xbox Division is not expected to be affected by these layoffs. The announcement email does not mention the Xbox Division. Last week, Nadella reaffirmed his commitment to the Xbox brand. Sales of the Xbox One have doubled in the US since the Kinect was removed as a mandatory component.