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Microsoft announces biggest layoff in history, cutting 18,000 jobs

Published time: July 17, 2014 12:25
Edited time: July 17, 2014 13:01
Microsoft CEO Satya Nadella (AFP Photo / Getty Images / Justin Sullivan)

Microsoft CEO Satya Nadella (AFP Photo / Getty Images / Justin Sullivan)

Microsoft will cut a record 18,000 jobs next year, as the company’s new CEO Satya Nadella seeks to boost efficiency, according to a company memo on Thursday.

“The first step to building the right organization for our ambitions is to realign our workforce. With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year,” Satya Nadella said in the memo published by Business Insider.

The number made redundant represents 14 percent of the entire Microsoft workforce.

Nadella assured that the layoff will be conducted “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 said.

The company is moving to layoff the first 13,000 workers, and most of the employees will be given notice over the next six months, the document added.

“Of that total, our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers,” it added.

Last year Finland’s troubled Nokia agreed a $7.4 billion takeover of its mobile phone division by Microsoft.

At the time the Finnish Prime Minister saw the departure of the Nokia business as very painfully for the country, calling the it “a symbol of economic growth” and even the “economic miracle of Finland.“

Integrating Nokia Devices and Services is one of the strategic goals for Microsoft, Nadella said.

“In addition, we plan to shift select Nokia X product designs to become Lumia products running Windows. This builds on our success in the affordable smartphone space, and aligns with our focus on Windows Universal Apps.”

Microsoft chose Indian-born Satya Nadella as successor to Steve Ballmer in February. He used to head the firm’s computing platforms and develop tools department.

Then Microsoft founder Bill Gates said there was "no better person to lead Microsoft".