Microsoft expected to announce thousands of job cuts Thursday

SEATTLE Thu Jul 17, 2014 9:45am IST

A shadow of a man using his mobile phone is cast near Microsoft logo at the 2014 Computex exhibition in Taipei June 4, 2014. REUTERS/Pichi Chuang/Files

A shadow of a man using his mobile phone is cast near Microsoft logo at the 2014 Computex exhibition in Taipei June 4, 2014.

Credit: Reuters/Pichi Chuang/Files

Related Topics

Stocks

   

SEATTLE (Reuters) - Microsoft Corp (MSFT.O) is set to cut more than 6,000 jobs in an announcement expected early Thursday, according to sources familiar with the matter, as it trims its newly acquired Nokia phone business and reshapes itself as a cloud-computing and mobile-friendly software company.

What could be the deepest job cuts in the company's 39-year history come five months into the tenure of Chief Executive Officer Satya Nadella, who outlined plans for a "leaner" business in a public memo to employees last week.

Many of the cuts are expected to come from the Nokia unit, which Microsoft acquired in April for $7.2 billion, pushing up Microsoft's headcount by a quarter to 127,000. Microsoft said when it struck the deal to buy the Finnish phone maker that it would cut $600 million per year in costs within 18 months of closing the acquisition.

Microsoft is also expected to trim staffing at its Xbox game and entertainment unit, which Nadella last week praised but stopped short of describing as a "core" business.

Nadella's cuts are set to be the biggest at the Redmond, Washington-based company since his predecessor Steve Ballmer axed 5,800, or about 6 percent of headcount at that time, in the depths of recession in early 2009.

The new CEO's move is designed to help Microsoft shift from being a primarily software-focused company to one that sells online services, apps and devices that it hopes will make people and businesses more productive. Nadella needs to make Microsoft a stronger competitor to Google Inc (GOOGL.O) and Apple Inc (AAPL.O), which have dominated the new era of mobile-centric computing.

Marking this change of emphasis, Nadella last week rebranded Microsoft as "the productivity and platform company for the mobile-first and cloud-first world."

Microsoft is not alone among the pioneers of the personal computer revolution that are now slimming down as they adapt to the Web-focused world.

PC-maker Hewlett-Packard Co (HPQ.N) is in the midst of a radical three-to-five-year plan that will lop up to 50,000 of its 250,000 staff.

International Business Machines (IBM.N) is undergoing a "workforce rebalancing," which analysts say could mean 13,000, or about 3 percent of its staff, being laid off or transferred to new owners as units are sold.

Chip maker Intel Corp (INTC.O) and network equipment maker Cisco Systems Inc (CSCO.O) both said in the past year they are cutting around 5 percent of their staff.

(Reporting by Ron Grover in Los Angeles and Bill Rigby in Seattle; Editing by Mohammad Zargham)

FILED UNDER:

TECH WRAP

Photo

Exclusive - Obama sharply criticizes China's plans for new technology rules

Barack Obama sharply criticized China's plans for new rules on U.S. tech companies, urging Beijing to change the policy if it wants to do business with the United States and saying he had raised it with President Xi Jinping.  Full Article 

Reuters Showcase

Indian Healthcare

Indian Healthcare

Exclusive - Payment delays dent India's flagship health, AIDS programmes  Full Article 

India-Pakistan Ties

India-Pakistan Ties

Indian, Pakistani foreign secretaries to meet in Islamabad.  Full Article 

Jaitley Speaks

Jaitley Speaks

India needs sustained GDP growth of 9-10 percent - Jaitley.  Full Article 

Obama Interview

Obama Interview

Exclusive - Nemtsov killing sign of worsening climate in Russia: Obama.  Full Article 

Environment Concerns

Environment Concerns

Deforestation could shift monsoons, leaving India high and dry.  Full Article 

Forbes Rich List

Forbes Rich List

Bill Gates tops Forbes rich list, Michael Jordan joins.  Full Article 

New Tour

New Tour

Pop icon Madonna announces dates for 'Rebel Heart' tour.  Full Article 

Lathmar Holi

In Pics: Lathmar Holi

Images of "Lathmar Holi" at Nandgaon in Uttar Pradesh.  Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage