Microsoft’s Massive Layoffs Announced: 18,000 Over The Next Year

Microsoft released a statement early Thursday that began with:

Microsoft Corp. today announced a restructuring plan to simplify its organization and align the recently acquired Nokia Devices and Services business with the company’s overall strategy. These steps will result in the elimination of up to 18,000 positions over the next year.

It was reported merely two days ago that the tech giant was to lay off thousands of employees sometime before July 22. This move comes as Microsoft is shifting focus towards the Nokia side of their business since the recent acquisition. USA Today reported that the company will lay off 12,500 of their professional and factory positions. This all comes on the heels of its $7 billion acquisition of Nokia’s handset business, which the company closed in April 25. The layoffs associated with this plan are expected to be mostly completed by December 31, 2014, and wholly completed by June 30, 2015. Microsoft’s plan is to eliminate 13,000 of the 18,000 in the next six months. The employees affected by the layoff were assured that they will earn severance and job transition help in many of their locations. These Microsoft layoffs mark the largest since the company made the decision to layoff 5,000 in 2009.

One striking thing that Microsoft’s newest CEO Satya Nadella stated in his memo to his employees:

“My promise to you is that we will go through this process in the most thoughtful and transparent way possible”

According to USA Today, FBR Capital Markets analyst Daniel Ives stated that the “larger than expected” cuts hints at Nadella’s larger plans to simplify Microsoft’s infrastructure. In fact, these layoffs are all part of Microsoft CEO Satya Nadella’s plan to consolidate the companies plans going forward. He told Microsoft employees last week that his vision was for a “Mobile first, Cloud first” world. The Microsoft CEO intends on further unifying software and hardware. It would appear that Microsoft is trying to catch up to Apple’s popular strategy of the “Marriage of Hardware and Software”. Steve Jobs utilized a this strategy and his company is still booming long after his passing. Mr. Nadella must be heading in the right direction because Microsoft’s pre-market trading shares were up 3.3 percent at $45.

It is unsure if this unique vision Microsoft and its new CEO will embark on will jettison it up and over the likes of Apple and Google, but unlike their last CEO Steve Ballmer, Mr. Nadella seems to have a grand vision for the future of Microsoft. The market will decide if this ambitious move will pay off.