Microsoft axes 18,000 jobs… and Android phones

Jane McCallion Read more July 17, 2014

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18,000 Microsoft employees will find themselves out of a job within the next six months, with the majority coming from the Nokia Devices and Services division.

In a letter to employees, CEO Satya Nadella said the decision was taken to build “the right organisation for [Microsoft’s] ambitions” and “work towards synergies and alignments” following the acquisition of Nokia.

12,500 employees in the Devices and Services division will be made redundant, along with 5,500 from other areas of the business.

What we think

Contributing editor Jon Honeyball: The loss of 12,500 former Nokia employees is, sadly for them, entirely predictable. Microsoft had a phone division in place and already staffed. It wasn’t going to cull its own when newcomers were available to take the chop. The other redundancies were entirely predictable too, and quite possibly the first of a number of significant lay-offs to come. Microsoft is massively bloated and arguably out of control. It has to fix this, and fix it soon.”

According to Nadella, Microsoft is “moving now to start reducing the first 13,000 positions”, adding the “vast majority” of the remaining 5,000 employees set to be axed will be informed of the decision by January.

This is the most significant cut in jobs the company has made in its 39-year history, representing 14% of its 127,000-strong global workforce.

Nadella has been hinting at significant changes to Microsoft’s organsiational structure over the past few days and weeks.

On Friday 11 July, he issued a letter to employees about his vision for the company, stating “job responsibilities will evolve” and “priorities will be adjusted [and] processes will be simplified” – a phrase reiterated in this most recent letter.

Nadella described the decision as “difficult, but necessary”, and promised all employees made redundant will be offered severance packages, adding that “everyone can expect to be treated with the respect they deserve for their contributions to this company”.

It is not just jobs that are being axed either. The company’s Nokia X Android devices, launched in February, also face the chop.

Nokia X

While it seems the line will be mostly discontinued, certain “select … product designs” will be transformed into Lumia products running on Windows Phone.

“This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps,” he said.