Investors back huge job cuts by Microsoft chief

 
Oliver Smith
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MICROSOFT chief executive Satya Nadella kick-started one of the largest round of layoffs in tech history yesterday when he announced the software giant would shed 18,000 jobs, a move supported by investors as Microsoft’s stock reached a 14-year high.

The cuts amount to 14 per cent of Microsoft’s total workforce, but the layoffs are largely weighted toward Microsoft’s newly acquired Nokia division, which will face around 12,500 job losses, or 40 per cent of the division’s workforce.

“We will simplify the way we work to drive greater accountability, become more agile and move faster,” Nadella wrote to employees in a memo.

“We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.”

The cuts were larger than previously expected and are the deepest in the software giant’s 39-year history, they come just five months into Nadella’s tenure having taken over from long-serving chief executive Steve Ballmer.

Microsoft’s €5.44bn (£4.5bn) acquisition of Nokia last September was expected to be followed by job cuts. Microsoft at the time said it would cut $600m per year in costs within 18 months of closing the acquisition.

The company yesterday said it expects to take pre-tax charges of between $1.1bn and $1.6bn over the next four quarters to account for the costs of the layoffs.

Microsoft’s shares rose one per cent yesterday to close up at $44.53.

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