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Microsoft to eliminate 18,000 positions; CEO Nadela informs employees via email

At 5:00am Pacific Time (5:30 pm IST) Microsoft posted an email from CEO Satya Nadella to ‘All Employees’ on its News Center. The email, titled “Starting to Evolve Our Organization and Culture”, informs employees that the overall workforce would be reduced by up to 18,000 jobs next year.

He adds that 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.

He goes on to say that 13,000 positions would be eliminated in the initial phase, and that most of these employees would be notified over the next six months.

In September 2013 Microsoft had announced that it will acquire all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services.

Later in April 2014 Microsoft informed that it would close the acquisition on April 25 and that Nokia’s Devices and Services business would be renamed Microsoft Mobile.

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In the email, Nadella emphasises that the entire process would be conducted in the most thoughtful and transparent manner. All impacted employees will receive severance packages and will receive assistance in job transition. He also adds that while positions in certain areas will be eliminated, there will be additions in other strategic areas.

Nadella mentions that this workforce reduction is primarily driven by two outcomes – work simplification and Nokia Devices and Services integration synergies and strategic alignment.

Microsoft’s Senior Leadership Team members are expected to share more details later today.

Nadella later explains that work simplification will drive greater accountability and make the organisation more agile. He also informs that management layers – both top down and sideways – will be reduced in the near future. The eventual goal is to create teams that are more productive and impactful.

Integration of Nokia Devices and Services teams into Microsoft is the other major reason for the layoff, explains Nadella. Importantly, he informs that

It is clear that Microsoft is betting big on the affordable smartphone space.

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Earlier today we had reported Google’s Android One plans for India. Now Microsoft hints that it is ready for a counterpunch. Indian users will be the ones with the biggest smile on their faces.

Last week Nadella had communicated to all employees the strategic direction Microsoft would follow in FY15, saying that:

The combination of many devices and cloud services used for generating and consuming data creates a unique opportunity for us. Our customers and society expect us to maximize the value of technology while also preserving the values that are timeless. We will create more natural human-computing interfaces that empower all individuals. We will develop and deploy secure platforms and infrastructure that enable all industries. And we will strike the right balance between using data to create intelligent, personal experiences, while maintaining security and privacy. By doing all of this, we will have the broadest impact.

Our passion is to enable people to thrive in this mobile-first and cloud-first world.

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