Microsoft to ax 18,000 jobs this year, laying off more than 14% of total workforce
Microsoft, as was expected, announced on Thursday that it will be laying off employees this year, but the total number of cuts are much higher than anticipated, representing by far the largest-ever personnel reduction in the Windows maker's history.
A total of 18,000 workers will be laid off over the next year, Microsoft revealed, with the bulk of those -- 12,500 jobs --?coming from professional and factory positions related to the purchase of Nokia. Microsoft's $7.2 billion buyout of Nokia's hardware division added some 30,000 employees to the company's payroll.
With the remaining 5,500 layoffs coming from other departments, the 18,000 sum represents by far the largest round of personnel cuts in Microsoft's corporate history. Its previous record was the axing of 5,800 jobs in 2009.
As of early June, Microsoft had just over 127,000 total employees. That means the 18,000 cuts would represent more than 14 percent of the Redmond, Wash., company's global workforce.
Microsoft said the "restructuring plan" will be "substantially complete" by the end of this year, and fully completed by the end of June 2015. It expects to incur up to $800 million in associated severance and benefit costs, as well as between $350 million and $800 million asset-related charges.
Word first leaked earlier this week that Microsoft was set to announce a major new round of layoffs, though it was unclear at the time whether the total number of cuts would be the company's largest ever. With Thursday's official announcement, it's now known that the 18,000 removed workers will be more than three times larger than its previous biggest layoffs.
The measures are the latest in a string of changes for the company, which is attempting to reclaim some of its past glories which have been lost to mobile devices. Microsoft was a major player in the smartphone space before the iPhone and device's running Google's Android took over the market, while sales of low-end PCs have been hurt by the success of the iPad.
While 18,000 jobs will be lost in the next year, the biggest firing may have been the ouster of former Chief Executive Steve Ballmer, who is rumored to have been squeezed out of the company due to a lack of support from Microsoft's board of directors. Ballmer faced significant criticism for failing to adapt and compete with Apple's iPhone and iPad, while high-profile misses with the company's Windows Vista and Windows 8 operating system releases were believed to have contributed to slumping PC sales.
Ballmer's replacement, and the man overseeing the massive round of layoffs, is CEO Satya Nadella, who took over the role in February. The cuts being made under his watch are part of a major attempt to turn the company's fortunes around and take back lost market share in mobile and reinvigorate sales growth in PCs.
A total of 18,000 workers will be laid off over the next year, Microsoft revealed, with the bulk of those -- 12,500 jobs --?coming from professional and factory positions related to the purchase of Nokia. Microsoft's $7.2 billion buyout of Nokia's hardware division added some 30,000 employees to the company's payroll.
With the remaining 5,500 layoffs coming from other departments, the 18,000 sum represents by far the largest round of personnel cuts in Microsoft's corporate history. Its previous record was the axing of 5,800 jobs in 2009.
As of early June, Microsoft had just over 127,000 total employees. That means the 18,000 cuts would represent more than 14 percent of the Redmond, Wash., company's global workforce.
Microsoft said the "restructuring plan" will be "substantially complete" by the end of this year, and fully completed by the end of June 2015. It expects to incur up to $800 million in associated severance and benefit costs, as well as between $350 million and $800 million asset-related charges.
Word first leaked earlier this week that Microsoft was set to announce a major new round of layoffs, though it was unclear at the time whether the total number of cuts would be the company's largest ever. With Thursday's official announcement, it's now known that the 18,000 removed workers will be more than three times larger than its previous biggest layoffs.
The measures are the latest in a string of changes for the company, which is attempting to reclaim some of its past glories which have been lost to mobile devices. Microsoft was a major player in the smartphone space before the iPhone and device's running Google's Android took over the market, while sales of low-end PCs have been hurt by the success of the iPad.
While 18,000 jobs will be lost in the next year, the biggest firing may have been the ouster of former Chief Executive Steve Ballmer, who is rumored to have been squeezed out of the company due to a lack of support from Microsoft's board of directors. Ballmer faced significant criticism for failing to adapt and compete with Apple's iPhone and iPad, while high-profile misses with the company's Windows Vista and Windows 8 operating system releases were believed to have contributed to slumping PC sales.
Ballmer's replacement, and the man overseeing the massive round of layoffs, is CEO Satya Nadella, who took over the role in February. The cuts being made under his watch are part of a major attempt to turn the company's fortunes around and take back lost market share in mobile and reinvigorate sales growth in PCs.
Comments
Hopefully some of the people let go were the ones who designed the GUI for Windows 8. There are open source (i.e. designed for free) GUIs that are better than that.
It's mostly people who've come over from Nokia.
Uh, you realise Ballmer has been gone for 6 months?
So that helps the bottom line. Any ideas on how to grow the top line?
It's mostly people who've come over from Nokia.
But it's still 5500 that weren't from Nokia, which still rivals their biggest layoff ever.
I'd rather see their marketing dept get a big hit than their GUI people. Most of them are following directives, and they don't need to concentrate on marketing their products. They need to make better ones.
Winning.
According to their website they have factories in Brazil, China, Hungary, India, Mexico, South Korea, and Vietnam.
http://www.nokia.com/global/about-us/people-and-planet/operations/production-facilities/production-facilities/
Regarding engineering, marketing, sales, those employees are all over the world, especially the ones related to Nokia.
They were corporate-speak for massive layoffs.
And they indicate that Microsoft still is rudderless.
I do not how Microsoft handled these layoffs, but in general, I hate how a lot of software companies handle layoffs. They tend to separate employees into two or three groups with one of the groups receiving the ax. The anxiety of clearly suspecting exactly why everybody is being separated despite superior feigning ignorance. And then at the meeting learning that everybody not present is packing up their belongings and leaving the office. But hey, lets follow up with a company sponsored lunch or movie for retained employees. Even more fun is when you realize your spouse is not in the retained group (that happened to me a few years back).
I haven't heard the new CEO chime in about specifics but one thing they can start doing is making beautiful products. For instance, there's no comparison between Office and iWork. The latter is well designed, easy, pleasing to use, and allows one to create exceptionally beautiful documents. Office? Well....it's a standard. For now.
I just keep going back to this Jobs interview on MS and lack of taste:
MS: Hire some Jonny Ives. Then listen to them.
Ballsy move!
Nadella just bought 3 envelopes ...
The rudder?
That's not healthy for a global economy. Kill jobs and over the long run you eliminate the ability of people to buy your products.