Microsoft has made an announcement that the company will be laying off up to 14% of its workforce, possibly leaving up to 18,000 employees without a job. This would represent the largest layoff in the company’s history. Microsoft’s new chief executive, Satya Nadella, has made the job cuts his first major change at the company. The goal, he said, was to make the company more nimble and focused.
It is believed that the employees at Microsoft’s Nokia mobile phone business are most at risk. Microsoft purchased Nokia’s mobile phone business in 2013, increasing its rosters to nearly 127,000 employees. The number of people employed at the company has nearly tripled over the past 10 years. Some Microsoft employees and investors viewed the Nokia deal as a dangerous adventure into the hardware business, an industry that Microsoft was not familiar with.
It is estimated that nearly 12,500 of the jobs lost will be in the Nokia division, around half of the 25,000 people who joined the company from Nokia. At Microsoft’s Nokia offices in Finland, 1,100 jobs will be eliminated. Another 1,800 employees will be laid off from a Nokia factory in Hungary.
Over its 39 years in business, Microsoft has become overly bureaucratic and slow moving. In recent years, Microsoft has announced reorganizations, new products and acquisitions intended to move the company out of its slump, but none of the actions has had the desired effect. Microsoft has lost ground in the technology industry on several fronts, including mobile, Internet search and cloud computing, to competitors like Apple, Google, Facebook and Amazon.
Since taking over the company in February, Mr. Nadella has improved employee morale and announced his intentions to inject new dynamism into the company. He has also announced the closing of Xbox Entertainment Studios, a group dedicated to producing original television programming for Microsoft’s video game system. Other moves may include trimming some product lines and reducing investment in the search engine and video game industries.
