14 DAY TRIAL // As expected, today Microsoft announced a massive job cut campaign that's supposed to help the company reduce costs following the acquisition of Nokia's devices and services unit.
As compared to what people expected, however, Microsoft is not firing 5,000 people, but 18,000, which is clearly the biggest layoff in the history of the software giant.
In a press statement this morning, the company explains that this job cut is expected to be completed by June 30, 2015, so it's going to work at full speed to fully accomplish its goals.
“Of the total, about 12,500 professional and factory positions will be eliminated through synergies and strategic alignment of the Nokia Devices and Services business acquired by Microsoft on April 25,” Microsoft said.
“The company expects to incur pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters, including $750 million to $800 million for severance and related benefit costs, and $350 million to $800 million of asset-related charges,” it said.
As you can see, most of these layoffs come from the recently-purchased Nokia Devices and Services unit, but a number of existing Microsofties are also said to be let go in the next 12 months.
Satya Nadella has already announced in a memo sent to employees last week that he worked with the other executives of the company to analyze the internal organization of each department, but there are no details as to how many people from which departments are expected to be fired.
Previous reports on the matter indicated that employees of the Xbox marketing department, but also software testers, would be among the ones affected by this decision; but again, Microsoft is yet to provide more info on this.
Satya Nadella said in a statement for employees that those getting fired would receive notifications in the coming six months.
“It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas. My promise to you is that we will go through this process in the most thoughtful and transparent way possible. We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company,” he explained.
Stephen Elop, former Nokia CEO now in charge of Microsoft's Devices unit, said in a letter to employees that severance benefits would be offered to those getting fired.
“The team transferring from Nokia and the teams that have been part of Microsoft have each experienced a number of remarkable changes these last few years. We operate in a competitive industry that moves rapidly, and change is necessary. As difficult as some of our changes are today, this direction deliberately aligns our work with the cross company efforts that Satya has described in his recent emails,” he said.
You can read the letters sent by the two Microsoft officials in the box below.