Microsoft to Lay Off 18,000 Employees, 14% of Workforce

Microsoft CEO Satya Nadella announces the largest round of cuts in the history of the company, to be completed over the next year.

Last week, a memo from Microsoft CEO Satya Nadella hinted at large organizational changes on the horizon.

Today the company announced plans to lay off 18,000 employees, over 14% of its entire workforce (currently about 125,000 people). This is by far the largest round of layoffs in the history of Microsoft; the second largest occurred in 2009 with cuts of over 5,800 employees.

12,500 of the looming terminations are associated with the Nokia device and services business it acquired in April 2014. Microsoft says this will include both professionals and factory workers.

Related: Microsoft at InfoComm 2014

Nadella’s July 9 memo pointed to new priorities and corporate realignment to come, saying the company needs to become more focused and efficient.

“We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes,” he wrote. “Culture change means we will do things differently.”

The news came this morning in an email to employees, saying most of the cuts are scheduled to be completed in the next six months. A company-wide meeting about the layoffs is scheduled for Friday, July 18, and Microsoft plans to announce its fourth-quarter fiscal 2014 earnings next week, on Tuesday, July 22.

Surprisingly, or perhaps not so, shares of Microsoft were up 3.6% in pre-market trading this morning following the announcement.

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