Microsoft to axe jobs in bid to become ‘more agile’

The move will dwarf Microsoft's previous biggest job cull. Picture: AP
The move will dwarf Microsoft's previous biggest job cull. Picture: AP
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TECHNOLOGY group Microsoft has unveiled the largest round of job cuts in its history, with 18,000 roles set to disappear in the next year as it works to integrate the Nokia mobile phone business it bought in April.

Cutbacks had been expected following the deal, but the scale of the losses, equivalent to 14 per cent of its headcount, surprised observers who had expected a reduction of more than 6,000.

The move will dwarf Microsoft’s previous biggest job cull, when it axed about 5,800 jobs in 2009 in its first widespread round of redundancies.

In an e-mail to employees, chief executive Satya Nadella, who succeeded previous boss Steve Ballmer in February, said the changes were needed for the company, which employs about 127,000 people around the world, to “become more agile and move faster”.

About 12,500 of the lay-offs will come from cutting professional and factory jobs as the US group seeks to reduce overlapping roles with the Nokia division, which it acquired in April for $7.2 billion (£4.2bn).

Nadella said: “We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.”

Microsoft, based in Redmond, Washington state, expects to incur charges of between $1.1bn and $1.6bn over the next four quarters, including up to $800 million for severance and related benefit costs.

The maker of Windows software and Xbox video game consoles will phase out phone factory operations in Hungary and reduce engineering work at sites in Beijing, San Diego, California, and Oulu in Finland. However, the group would not say how many roles are to go in the UK, where it employs 3,500 people in Edinburgh, London and Reading, Berkshire.

Microsoft is not alone among computer companies now slimming down to adapt to a world dominated by mobile internet-connected devices.

Hewlett-Packard is planning to cut 50,000 from its headcount of 250,000, while chip-maker Intel and network equipment specialist Cisco have both said in the past year they were cutting about 5 per cent of their staff.