Microsoft to axe up to 18 000 staff

Microsoft will eliminate as many as 18 000 jobs, the largest round of cuts in its history, the software maker said last week, as chief executive Satya Nadella integrates Nokia’s handset unit and slims down the company. The restructuring, amounting to about 14% of its workforce, included 12 500 factory and professional positions, the world’s biggest software maker said. The job cuts were expected to be completed by the end of June next year, and would result in pretax charges of between US$1.1 billion (N$12 billion) and US$1.6 billion (N$17.1 billion). Nadella, who took over from Steve Ballmer in February, is retooling the company’s structure as it seeks to compete with nimbler rivals offering mobile and internet-based software and services. He is also working to wring a promised US$600 million (N$6.4 billion) in annual savings from Microsoft’s Nokia deal, which added about 30 000 workers in April, bringing the total workforce to about 127 100. “Microsoft needs to be a leaner tech giant over the coming years in order to strike the right balance of growth and profitability around its cloud and mobile endeavours,” Daniel Ives, an analyst at FBR Capital Markets, said. In his first mission statement, Nadella said last week that the software maker needed to become more focused and efficient and required changes to its engineering teams. He pledged updates on the new plans later this month, and said he would provide more details when the company reported earnings next week. Ives said Microsoft investors were likely to view the cuts as a positive sign, illustrating that Nadella was trying to get costs and headcount under control and that he understood the challenges facing the company. “We view this as another step in the right direction from the Street’s perspective,” he said. “Nadella is not wearing rose-coloured glasses.” In appearances at company and technology events since he took the helm, Nadella has reiterated that the company’s priorities were mobile and cloud products, as he works to shift Microsoft away from its longtime core business of software for personal computers. SEATTLE BLOOMBERG