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Microsoft to cut up to 18,000 jobs over next year

REDMOND, Wash. (AP) — Microsoft is cutting up to 18,000 jobs, about 14 percent of its staff, over the next year as it works on integrating the Nokia devices business it bought in April and cut down on management layers.

Microsoft Visitor Center in Redmond, Wash.
Microsoft Visitor Center in Redmond, Wash. (AP Photo Ted S. Warren)

The news sent shares up 3 percent in premarket trading.

It’s the boldest move by CEO Satya Nadella since he took the reins from Steve Ballmer in February. In a public email to employees on Thursday, he said the changes were needed “become more agile and move faster.”

Of the 18,000 job cuts, about 12,500 professional and factory jobs will be cut. Microsoft expects charges of $1.1 billion to $1.6 billion over the next four quarters, which includes $750 million to $800 million for severance and related benefit costs.

Microsoft has been shifting its focus from traditional PC software to cloud computing and cloud-based products like its Office 365 productivity software.

In a blog posting a week ago, Nadella hinted at the move, saying Microsoft had to “change and evolve” its culture for the “mobile-first and cloud-first world.”

Nadella said Thursday he would give more details when Redmond, Wash.-based Microsoft reports fiscal 2014 results on Tuesday.

Shares of Microsoft rose $1.35, or 3.1 percent, to $45.43 in premarket trading. The stock is up nearly 18 percent since the beginning of the year.

 

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed)

 

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