Satya Nadella, the newly appoint CEO of Microsoft has just confirmed in a memo that was released on July 17, that the company will cut 18,000 employees in what will be the largest restructuring effort ever undertaken by the Redmond, WA based software giant.
The news about the layoffs has comes as no surprise given that last week, Nadella released a memo to employees about the company’s plan to restructure. After the announcement last Thursday, Satya Nadella avoided questions from the media in regards to what might be happening behind the scenes at Microsoft, and he completely avoided questions about potential employee layoffs, fueling speculation that there may well be a huge shift within the company. Just yesterday on July 16 the New York Times caught wind of this potential announcement, but even they did not realize just how many employees would be impacted.
As expected the layoffs at Microsoft will primarily impact the majority of employees that Microsoft acquired through the purchase of Nokia’s Devices and Services division earlier on this year for $5 billion. Some 25,000 employees joined the ranks at Microsoft after the buyout, and now 12,500 of the 18,000 that will be leaving the company came from Nokia. The rest of the layoffs will impact many other departments within the company, including many middle management positions.
The last round of layoffs in 2009 saw 5,800 employees terminated, but this round of axe wielding is will triple the number of employees who were axe during the last round of cuts. The layoffs come as no surprise given the fact that Nadella has repeatedly told shareholders and the press that he believes the software giant needs to be re-organized so that the company can regain focus in key areas, and become more agile moving forward.
While the acquisition of Nokia was a necessary one for Microsoft, it is unfortunate that so many of the hardworking employees who helped build an empire in Finland will simply be turned lose into an unforgiving landscape that is the current economy and job marketplace. The cuts will not take place immediately as previously thought, but the vast majority of the employees will not be employed by Microsoft by the end of the year.