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[July 18, 2014]
Microsoft to cut up to 18,000 jobs worldwide [Western Mail (Wales)]
(Western Mail (Wales) Via Acquire Media NewsEdge) COMPUTER software giant Microsoft is set to cut up to 18,000 jobs in the next year, with more than half of those coming from the Nokia arm of the business which was purchased earlier this year.
In an email to staff that has since been published on the official company blog, CEO Satya Nadella said that the company, founded by Bill Gates 39 years ago, needed to "evolve our organisation and culture".
"The first step to building the right organisation 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", Mr Nadella said.
"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.
"We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months.
"It's important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas." Mr Nadella took over as CEO in February added: "Making these decisions to change are difficult, but necessary." Microsoft pledged to cut $600m (Pounds 350.8m) per year in costs within 18 months of closing the Nokia deal.
This is the biggest cut of staff in the company's history, with the last signifi-cant reshuffle coming in 2009, when former chief Steve Ballmer axed 5,800 staff.
Microsoft has been making efforts to re-brand the business in recent months in a bid to keep up with rivals Apple and Samsung. The company has placed more attention on software and apps, and recently unveiled updates to its Windows 8 mobile and desktop operating systems, both of which have been criticised in the past.
The company acquired Finnish phone manufacturer Nokia earlier this year, gaining 32,000 staff. As Mr Nadella said in his announcement, more than 12,000 of these jobs will now vanish.
Stuart Miles, CEO and founder of technology website Pocket-lint believes the move is to keep Microsoft lean to deal with increased competition.
"It's clear that the new vision of cloud computing doesn't need as many people to run it. As Microsoft looks to realign and challenge other brands in this hugely competitive space, it needs to stay as lean and mean as many of the start-ups it competes against," he said.
Last week Mr Nadella announced a shift in focus within Microsoft, with more emphasis to be placed on the cloud.
Mr Nadella said the company needed to be "the productivity and platform company for the mobile-first and cloud-first world." Duncan Bell, operations editor at UK-based gadget magazine T3 said the Windows developer was paying for poor performances in recent years.
"The cuts are no surprise given the poor performance over many years of Microsoft acquisition Nokia and the changing tech marketplace. The scale of the cuts will be surprising to many, though," he said.
"Microsoft will emerge as a leaner, more focused entity at the end of this process. That's not much of a consolation to those laid off, however, and the cuts are an indictment of the way the firm's been managed over the last five to ten years. Microsoft gave away the smartphone market it invented to Apple, Samsung and Google, and bemused and dismayed its customers with Windows Vista and Windows 8." (c) 2014 ProQuest Information and Learning Company; All Rights Reserved.
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