Microsoft will shed 18,000 jobs in the biggest job cuts in the company’s 39-year history as it finalises integration of the Nokia business.
About 14 per cent of Microsoft’s global workforce will be laid off with most of the redundancies being made in areas were responsibility overlaps occurred after Microsoft’s acquisition of the Finnish mobile phone maker.
The job cuts have come about five months after the appointment of Satya Nadella as a new CEO of Microsoft. Earlier this month, Nadella said in a public memo that he aims to turn Microsoft into a "leaner" business, reshaping it into a cloud-computing and mobile-friendly company.
About 12,500 of the layoffs will come from eliminating overlaps with the Nokia unit, which Microsoft acquired in April for $7.2bn (£4.2bn). Microsoft did not say how many jobs would come from Nokia and how many from existing operations. The acquisition of Nokia's handset business in April added 25,000 people to Microsoft, pushing its overall headcount up to 127,000.
The Nokia-related cuts were widely expected. Microsoft said when it struck the deal that it would cut $600 million per year in costs within 18 months of closing the acquisition.
Microsoft did not detail exactly where the remaining jobs would be cut, but said the first wave of layoffs would affect 1,351 jobs in the Seattle area.
The company said it expects to take pretax charges of $1.1 billion to $1.6 billion over the next four quarters to account for the costs of the layoffs.
Nadella's cuts are the biggest at the Redmond, Washington-based company since predecessor Steve Ballmer axed 5,800, or about 6 per cent of headcount, in the depths of the recession in early 2009.
Microsoft is not alone among the pioneers of the personal computer revolution now slimming down to adapt to the Web-focused world.
PC-maker Hewlett-Packard is in the midst of a radical three-to-five-year plan that will see it 250,000-strong workforce being reduced by up to 50,000.
International Business Machines Corp undergoing a "workforce rebalancing," which analysts say could mean 13,000, or about 3 percent of its staff, being laid off or transferred to new owners as units are sold.
Chipmaker Intel Corp and network equipment maker Cisco Systems both said in the past year they were cutting about 5 percent of their staffs.