Microsoft Corp. (NASDAQ:MSFT) is planning its biggest round of job cuts in five years, as the software maker looks to slim down and integrate Nokia Oyj’s handset unit, people with knowledge of the company’s plans said.
The reductions -- which may be unveiled as soon as this week -- will probably be in areas such as Nokia and divisions of Microsoft that overlap with that business, as well as marketing and engineering, said the people, who asked not to be identified because the plans aren’t public. The restructuring may end up being the biggest in Microsoft history, topping the 5,800 jobs cut in 2009, two of the people said. Some details are still being worked out, two of the people said.
The announcement would come one week after Chief Executive Officer Satya Nadella issued his first company mission statement, calling for greater emphasis on mobile devices, cloud-computing and productivity software. In the July 10 memo, which also called for Microsoft to become more focused and efficient, Nadella, who took over from Steve Ballmer in February, said he would provide more specifics on implementation later this month.
While Microsoft has undergone smaller, intermittent job cuts in individual businesses -- for example trimming a few hundred positions in advertising sales and marketing in 2012 and some marketing jobs across the company earlier that same year -- the company has only undertaken a companywide restructuring impacting thousands of workers once before, in 2009 at the start of the recession. Over the course of that year, the company cut 5,800 jobs, or about 5 percent of its workforce at the time.
Microsoft shares rose less than 1 percent to $42.37 at 9:35 a.m. in New York. The stock had climbed 13 percent so far this year through yesterday.
Peter Wootton, a spokesman for Redmond, Washington-based Microsoft, declined to comment.
Some of the job cuts will be in marketing departments for businesses such as the global Xbox team, said the people. The European Xbox team is based in Reading, U.K.
The company had 127,104 employees as of June 5, after adding about 30,000 in its acquisition of Nokia’s handset unit.
When Microsoft agreed to acquire Nokia’s mobile-phone business in September, the software maker pledged $600 million in annual cost savings in the 18 months after the deal closes. Meeting that commitment will probably involve job cuts in areas where the two companies overlap, said the people. Other job cuts may result from changes Nadella is making to the engineering organization, people with knowledge of the matter said last week.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.