Microsoft is laying off 14% of employees as it overhauls its mobile business

July 17, 2014
Obsession
Mobile Web
July 17, 2014

Microsoft told employees this morning that it would cut up to 18,000 jobs, 14% of its total workforce, over the next year. These will be the largest layoffs in company history, with 12,500 jobs coming from the Nokia Devices and Services division which Microsoft acquired in a $7.2 billion deal completed in April. The news was delivered in an internal memo from CEO Satya Nadella.

The company plans to “drive greater accountability, become more agile and move faster,” the memo read, and have “fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.”

Future Nokia phones will all run Microsoft’s Windows mobile software, and Microsoft will consolidate its internal Smart Devices and Mobile Phones units into a single phone unit, according to an email from former Nokia CEO and current head of Microsoft’s Devices and Services unit Stephen Elop.

The announcement comes after a 3,000 word manifesto published by Nadella last week that emphasized a need to focus on mobile and cloud products. But the word “Nokia” only appeared once in that document, and Microsoft’s mobile plans seem more focused on cloud platforms and services than manufacturing phones. (Nadella said the goal for Nokia is to “responsibly make the market for Windows Phone,” which sounds like a relatively smaller effort.)

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