Microsoft will be announcing job cuts early Thursday. The news reflects the notion that the firm will be trimming its newly acquired Nokia phone business as well as reshaping the technological company as a cloud-computing and mobile-friendly software company. According to a Yahoo! News report Wednesday night, the expected job cuts could be the steepest job cuts in the company’s history which now spans 39 years.
Last week, the Chief Executive Officer, Satya Nadella – who has only been in the executive position for some five months now – announced a plan for such cuts in a public memorandum that was issued to all of Microsoft’s employees. The Nokia unit of the firm is where many of the job cuts are most likely to happen. Nokia was acquired for some $7.2 billion three months ago. That transaction reportedly increased Microsoft’s headcount to 127,000 employees – which is approximately a quarter of its workforce.
Microsoft had previously warned that within a year-and-a-half it would cut $600 million annually in costs after making the deal with Nokia. Additionally, Microsoft will likely be downsizing its Xbox game and entertainment unit’s staff. The large number of job losses at the company will be the biggest number of job cuts since Steve Ballmer, Microsoft’s former chief, cut 5,800 during the recession some 5 years ago. That major reduction in workforce involved approximately 6 percent of Microsoft’s employees at that time. CNBC says that 1,000 of the job cuts will be in Finland where Nokia has been based.
It is reported that Nadella’s latest move to reduce staff is designed to assist in changing Microsoft from being a software company to a firm that will sell online services, apps and devices that with help people and businesses throughout the world become more productive. Nadella’s move is designed to toughen up Microsoft so that it can better compete with Apple Inc. and Google Inc. In general, the tech industry is in the midst of cutting forces as Intel, Cisco Systems and Hewlett Packard have recently had sizable staff cuts as well.