Jul 16, 2014

    Microsoft headed for biggest job cuts?


    MICROSOFT is planning its biggest round of job cuts in five years, as the software maker looks to slim down and integrate Nokia's handset unit, people with knowledge of the company's plans said.

    The reductions - which may be unveiled as soon as this week - will probably be in the Nokia unit and divisions of Microsoft that overlap with the business, as well as marketing and engineering, said the sources, who asked not to be identified because the plans have not yet been made public.

    The restructuring may end up being the biggest in Microsoft history, topping the 5,800 jobs cut in 2009. Some details were still being worked out, two of the sources said.

    News of the likely announcement comes just after chief executive Satya Nadella issued his first company mission statement, calling for greater emphasis on mobile devices, cloud-computing and productivity software.

    In his July 10 memo, which also called for Microsoft to become more focused and efficient, Mr Nadella, who took over from Steve Ballmer in February, said he would provide more specifics on implementation later this month.

    While Microsoft has undergone smaller, intermittent job cuts in individual businesses - for example, trimming a few hundred positions in advertising sales and marketing in 2012, and some marketing jobs across the company earlier that year - the company has undertaken a company-wide restructuring impacting thousands of workers only once before, in 2009 at the start of the recession.

    Over the course of that year, it cut 5,800 jobs, or about 5 per cent of its workforce at the time.

    Some of the latest job cuts will be in marketing departments of businesses such as the global Xbox team, the sources said.

    The company had 127,104 employees as of June 5, after adding about 30,000 with its acquisition of Nokia's handset unit.

    When Microsoft agreed to acquire Nokia's mobile-phone business in September, the software maker pledged US$600 million (about S$750 million) in annual cost savings in the 18 months after the deal closed.

    Meeting that commitment will probably involve job cuts in areas where the two companies overlap, the sources said. Other job cuts may result from changes Mr Nadella is making to the engineering organisation.