Update 7/17/14 10:37 a.m. ET: Digital Trends reached out to Microsoft for comments on these cuts and what they mean for the company in both the short and long term. Microsoft declined to offer any statements.
Microsoft announced today that the company will be cutting “up to” 18,000 jobs over the next year as part of a “restructuring plan.” The announcement was made in this official blog post.
Of those 18,000 positions, Microsoft says that roughly 12,500 of the cuts will come from “professional and factory positions,” which “will be eliminated through synergies and strategic alignment of the Nokia Devices and Services business acquired by Microsoft.” Microsoft completed this acquisition on April 25 of this year.
Microsoft expects this process to be fully complete by June 30, 2015, and “substantially complete” by December 31 of this year. It’s unclear what Microsoft means by “substantially complete.”
In this email from Microsoft CEO Satya Nadella to Microsoft employees, which was sent this morning, Nadella stated that most of the people whose jobs will be cut will be notified “over the next six months.” Nadella said that though the company is eliminating positions in some areas, he claims that it will add jobs in others. However, he did not expand on which divisions will see hirings. It’s also unclear why Microsoft will be taking six months to notify people of the cuts, instead of telling them now.
As mentioned above, Microsoft states that these cuts are part of a campaign to “simplify organization” in the company. Nadella offered some details regarding these plans in his email to Microsoft employees this morning.
“We will simplify the way we work to drive greater accountability, become more agile, and move faster,” Nadella said. “As part of modernizing our engineering processes the expectations we have from each of our disciplines will change. In addition, we plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.”
Stephen Elop, Executive Vice President of Microsoft’s Devices and Services Division, sent out an email of his own to company employees. In it, he provided a brief outline for the strategy that will be adopted for Windows Phone and Nokia devices going forward, which includes the elimination of the Nokia X Android project.
“We plan to drive Windows Phone volume by targeting the more affordable smartphone segments, which are the fastest growing segments of the market, with Lumia,” Elop said. “We plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices. To win in the higher price segments, we will focus on delivering great breakthrough products in alignment with major milestones ahead from both the Windows team and the Applications and Services Group.”
These job cuts come after a recent report from Bloomberg indicated that Microsoft could be announcing plans to cut jobs as soon as this week. Last week, Nadella sent out an email stating that a culture change needed to occur in the company.