Microsoft layoffs get official, 18,000 jobs to be cut in largest round of layoffs ever

Microsoft is a company that is undergoing significant change. With a new CEO, a new marching beat and a new hardware unit that makes millions of smartphones per year, the company looks dramatically different compared with a year ago. Unfortunately, as Microsoft has shifted and changed over the last 12 months, the need for further reorganization has arisen and thus, the decision to cut 18,000 jobs from the workforce was made.

It's not all that surprising, given that when Microsoft bought the Nokia mobility arm, it gained 25,000 employees, making some redundancies inevitable, given the overlap of some roles. Indeed, those that joined the company from Nokia will bear the brunt of the layoffs - 12,500 of the jobs to be cut will be former Nokia employees. The cuts extend further into the core of Microsoft as well, with an additional 5,500 jobs to be terminated from other MS departments. 

As you would expect, Wall St. is loving the cuts as they see this as a way to streamline the massive tech giant - and with fewer employees, profitability is expected to rise too. Satya Nadella first hinted at these layoffs in his letter last week where he talked about the changing structure of Microsoft and started to lay the groundwork for his 'Mobile First, Cloud First' strategy. 

Layoff are never a fun thing to be a part of, and we are sure that the decision was not easy for the Microsoft management. For Microsoft, these types of changes are necessary to keep the company on the correct line of profitability, but that doesn't mean that cutting heads is an easy decision.

Even so, considering that Microsoft remains a very profitable company with billions in the bank, we would expect that the severance packages should be quite good for those employees who are asked to leave the company.

Source: Microsoft

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As much as this sucks for those who get affected, for the company it's no surprise. You have a huge recent acquisition and you have a new CEO at the helm. I'd have been surprised if this didn't happen. They're obviously trying to streamline and clear out the clutter. Given the weird way they've done things the past few years, I'd say that's a good thing.

Layoffs suck and I've been there but you can't blame a business for trying to keep up with the times.

I hope the process happens quickly, if its long and drawn out a layoff procedure as big as this can really pull a company down and right now thats the last thing that Microsoft needs to be managing.

Hum said,
Microsoft's s time has passed.

I think they could still pull out of the huge nose dive they are in if they dropped ALL the other crap and went back to what they are good at -- making *desktop* and server OSs.

Drop Bing, Xbox, tablets, phones, and everything else that is just bleeding money.

If MS (or someone else) didn't buy out Nokia's handset division, the company would've eventually collapsed. It looks like this way at least half of Nokia's employees will still have a job as opposed to 100% needing to find work.

Well when a company gets too bloated, it can run into the issues that MS has over the years with poor managements, in-fighting, slow to respond, etc.

MS went through the huge 'reorg' not long ago which saw many executives get pushed out and now they are looking at every division within MS to cut down on redundancy, etc. Nokia's addition of 30k just made this even more important. This is not a happy time for anyone affected, but sometimes it has to happen. As long as MS does right by those affected, it will soften the blow a bit.

I hope that everyone actually reads the details on the layoffs, because its important to note a few things:

1. While Nokia employees are being let go, its not clear how many are being let go. The letter from the MS CEO stated that 12,500 were the result of the Nokia acquisition, so that could easily be MS employees that get the cut. My guess is that MS is going through a major evaluation to figure out if a Nokia employee or MS employee is better suited to a specific position.

2. In that same letter, it is noted that beyond the support MS will give to anyone laid off, there is a good chance that many of the people affected can take a new position elsewhere within MS. So in effect, they would be transferring, not leaving completely.

3. The layoffs are affecting all of MS, every division is being evaluated for redundancy and efficiency.

4. Finally, for those that do leave, MS will be doing what it can to help them find new jobs and provide severance packages. Losing your job sucks, I know, but I would feel just a little better knowing that I had that kind of cushion to soften the blow. I didn't have that when I lose my last job lol.

what a bunch of douchebags. they knew this was going to have to happen at some point. It sucks when you are bought out and now all a sudden you are considered 'useless'. Take as much copyrights info and use it against then

Exactly. And the man responsible for the whole mess, Elop, I don't suppose he is getting the boot?

And didn't microsoft say they were buying Nokia for the production / hardware talent to move WP production in house? So why then are they firing the factory folks first? I guess that was a farce then.

Well, so it begins...

recursive said,
... And the man responsible for the whole mess, Elop, I don't suppose he is getting the boot?

Golden parachute!

Don't be expendable. If you are a low level do-nothing, then better your life and move up. If you are still in the ###### position you were 5 years before, its your fault, not your companies.

corrosive23 said,
Don't be expendable. If you are a low level do-nothing, then better your life and move up. If you are still in the ###### position you were 5 years before, its your fault, not your companies.

What a load of baloney. I'm still doing the same job I was doing 15 years ago. Why? Because there's zero possiblity of vertical movement in the place I work at. I'm the senior developer, and that's as high as I can go in our small division unless one of the management guys decides to quit.

And relocating to another office isn't on the cards, that would mean moving my entire family to another country.

FloatingFatMan said,

What a load of baloney. I'm still doing the same job I was doing 15 years ago. Why? Because there's zero possiblity of vertical movement in the place I work at. I'm the senior developer, and that's as high as I can go in our small division unless one of the management guys decides to quit.

And relocating to another office isn't on the cards, that would mean moving my entire family to another country.

Then you musn't be working at microsoft. You see, at microsoft they have this thing called stack ranking, which means it doesn't matter if you were doing your job well or not, if you haven't moved up the ranks by bringing someone else down, you will get expelled sooner or later, possibly by someone stabbing you from down below to get ahead. Its just how the machinery works.

As much as layoffs hurt, the job market for the IT sector is impressive these days. I'm pretty sure most if not all will be able to find new gig's very easy. Having MS / Nokia on their resume is a huge plus.

how ironic

my last company made a lot of IT staff redundant when they finished the azure / exchange / sccm / 365 / fim migration projects

a lot of what the IT staff did are now handled by ms cloud systems

where we had say 5 1st line technicians imaging and setting up machines, the vendor installs them straight to the users desk, and everything from there on in is fully automated.

technically good, but not good for those who lost their jobs (esp the guys with families)

Holy hell, I never would have predicted this many layoffs. I would have guessed 5-8k. 18k is more than just a handful of redundant positions.

recursive said,
Its a huge fail any way you slice it.

Ah what a surprise to see you here again.

So Google's layoffs were a huge fail too right? Surprising you never ever mention them.

recursive said,
Its a huge fail any way you slice it.

Wait when Google layoffs employees after buying Motorola that's good business, but when MSFT does the same that's a "huge fail"? I applaud your model of unbiased consistency good sir.

Wow. I guess the new CEO is not going to be quite so popular amongst Microsoft employees... (unless of course these changes were already planned to happen prior to him becoming CEO!)

Chicane-UK said,
Wow. I guess the new CEO is not going to be quite so popular amongst Microsoft employees... (unless of course these changes were already planned to happen prior to him becoming CEO!)

Did you read his statements? you should then...

Chicane-UK said,
Wow. I guess the new CEO is not going to be quite so popular amongst Microsoft employees... (unless of course these changes were already planned to happen prior to him becoming CEO!)
The changes had to be done. Nokia wasn't making money and had a lot of fat to trim and that's exactly what they did. MS also had fat of its own. I think the'll do better now

I think they are going to hate Stephen Elop more. He fired thousands of people in Nokia before moving over to MS. Now even more people are being fired because of the sale to MS which he had a hand in.

We don't know who exactly those 12,500 out of the 25,000 are, but I'm guessing they're all low level marketing/sales and other such type jobs that MS already has people doing it. The people they are keeping, the other 12,500 (half), are the key people, the coders, hardware designers and so on. Heck it wouldn't surprise me at all if those 5,500 from MS are middle management in marketing/PR and so on that are on the way out now.

Does it suck? Yes, but I don't see in what logical sense anyone should keep you around and pay you when what you're doing, if anything, isn't needed? That's like me hiring a maid to clean my business for the months it's actually closed. There's no point to it. It's also not like MS is going to just give them their pink slip and kick them out on the street, the post is clear, they're going to get a good bit of thank you money and in many cases MS will help move them to some other job, maybe with one of their many partners.

"Low Level" and "Key People" are not mutually exclusive. Companies have fat at all levels. You do get some low level people who do the minimum to not get fired, but there are also directors who no one really knows what they do, because they don't really have a job. There will also be reorganization, which means balancing work loads.

sphbecker said,
"Low Level" and "Key People" are not mutually exclusive. Companies have fat at all levels. You do get some low level people who do the minimum to not get fired, but there are also directors who no one really knows what they do, because they don't really have a job. There will also be reorganization, which means balancing work loads.

No doubt that there's "fat" at both ends but in his last post Nadella talked about removing layers that get in the way of moving quick and innovating, that to me speaks management, all these VPs of so and so. And in MS's case, most of the low level people are the actual coders, so you could say they're more important in this case.

I doubt that. I guessing MS will keep most of the sales people to keep relationship with hundreds of network carriers globally.
Most of the people fired will likely to be engineers, programmers and marketing.
MS already has their own engineering and programmers as part of window phone division. So those guys are likely fired and some incorporated.

Most likely, this layoff is the alignment after their purchase of Nokia. MS is probably taking the opportunity to make other cuts too, but anytime two large companies merge, there is always a big layoff to follow.

"In addition, we plan to shift select Nokia X product designs to become Lumia products running Windows. This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps."
That's a good move !

It sucks people losing jobs, will be interesting to see how its handled by Microsoft.

Also, interest to know who's going from Microsoft Mobile and the rest of the company whole.

Its all about making money. Microsoft isn't the global powerhouse it once was. Still, as others have said, totally sucks that its happening :(

Anarkii said,
Its all about making money. Microsoft isn't the global powerhouse it once was. Still, as others have said, totally sucks that its happening :(

It's not? ha! of course it is. They have taken the cloud by storm and are restructuring to changing times. Besides what do you expect them to do with those duplicate jobs from the Nokia Division? keep them? it does not work that way. or are you telling me that you would keep two baby sitters taking care of your kids and pay both just for the hell of it?

Raa said,
Microsoft has taken the cloud by storm? You're kidding right?

Are we referring to the pun? If it was deliberate, *applause*.

Microsoft's profit for the year will probably drop by double digit percentage figures when they announce it next week. Most of it will be due to consolidation of Nokia's huge losses.
Remember when Google bought Motorola? Their profits tanked.
The announcement is probably to show that they are doing something to shareholders to show that they are minimizing loss and boost profitability.


The 12500 job cuts were probably Ballmer's plan to convince to MS board in buying Nokia.

You do realize that there workforce is growing right? Microsoft isn't going anywhere, this is getting rid of redundant jobs because of the NOKIA takeover. Which doesn't make it any easier on the people who are affected off course. I hope they are able to find a new workplace soon.

As a simple reply, yes, that is what the shareholders of a company allow the company to exist for, to make money. Would you be happy if your MSFT stock went down in value by 10% but they sent you a nice letter saying they didn't lay anyone off?

I do not understand why people make statements like this, as if a company is being evil for doing the exact same thing that every person on this forum has done on a personal level. When you don't have as much money as you would like, what do you do? You spend less. Spending less at restaurants, (as a single example) means the staff misses out on tips. Maybe you have a cleaning or lawn service you decide to stop using. Your choice may not directly impact a single person's job as much as being laid off, but the cumulative effect is the same.

I think we all know the writing is on the wall for MS. The traditional PC is slowly becoming less relevant and they have not been able to dominate the mobile market. MS must shrink as a company to stay in business. I think it is great that they are doing this now instead of waiting to pile up a ton of debt.

sphbecker said,
Would you be happy if your MSFT stock went down in value by 10% but they sent you a nice letter saying they didn't lay anyone off?

Yes.

It's not all about money (not to say that that isn't a big part). You don't get to keep your job for the sake of keeping your job. If it's not necessary it's not necessary. It sucks for those that are getting laid off, but that's how it goes.

elenarie said,

Yes.

You either have not thought about your reply or are a liar. Let's say you had $100,000 invested in MSFT, if its value goes down 10%, then you just lost $10,000. If you have money you want to donate, then you would donate it to a charity where it can actually make a difference, not to a company in the hopes it would keep people employed a bit longer.

At the end of the day, what have you saved? Nothing really. If the company cannot be profitable with its current balance sheet, then it would keep losing money year after year until it closes shop, then everyone loses their job. I would prefer to see the company restructured than closed.

PS: My brother-in-law just lost his job. You just said you are willing to lose money to help strangers not lose their income. PM me to get his address so you can send him money to make it through the next few months.

elenarie said,
Congrats! Well done! $ before everything.
In reality what happened is Microsoft could only save half of the 25k jobs that would've otherwise been let go if Nokia went down the hole. Now instead, Nokia is still going with the rest of their employees and an extra $7.2 billion, Microsoft gained 12.5k people with their work in mobile to replace 5.5k people that weren't as skilled that can keep working on their passion, and 12.5k other people will have to find new jobs.

Yes it's unfortunate for some, but at the same time it's business and it did help everyone from Nokia, minus 12.5k employees.

There is also the possibility of moving those 18K people (that a freaking town, for crap's sake, not some small number) to other jobs where needed. They could have easily transferred the majority of them into their other divisions, increasing agility and efficiency, instead of being roflstomped by competition and coming out with products such as Xbox Music.

100,000 employees, and they weren't able to produce a better Xbox One and not the joke they released, or Xbox Music, or whatever other crap service / app / whatever that they had done in the last few years?

Enron said,
I'm sure the cloud can do more work than the 18,000 people they are letting go.

Didn't know the cloud was self aware and made decisions on it's own :p

dang, feel for them. Loosing your job is not a good time and even worse when it isnt because you did anything wrong. Guy I worked with for the past 2yrs got layed off. They called it "Corporate Restructuring"

Steven P. said,
In our article "12,500 of the jobs to be cut will be former Nokia employees." :|

Assuming corporate functions like HR, marketing, finance, IT, etc will be hit hard. Plus maybe closing some factories ?

dopydope said,

Assuming corporate functions like HR, marketing, finance, IT, etc will be hit hard. Plus maybe closing some factories ?

I think marketing getting hit hard is a given at this point, also sales and so on. I doubt they're going to close any of the factories though, I think they'll want to keep those and use them to make Surface and Xbox hardware and whatever else they can think of, not to mention they're still going to be making Lumias, that's not going anywhere, it's actually expanding now with what Nadella said about moving some planned Nokia X devices to Windows and Lumia. Pretty much means that the X android line is done for, X2 is probably the last thing we'll see.

@Steven P When I first saw the number 10,000 I was very surprised. Because Finnish government was involved in mobile business take over and they would have never approved it if Microsoft was to eliminate 10,000 jobs in Finland.

George P said,

I doubt they're going to close any of the factories though, I think they'll want to keep those and use them to make Surface and Xbox hardware and whatever else they can think of, not to mention they're still going to be making Lumias, that's not going anywhere, it's actually expanding now ....

Dont forget MS also bought the dumbphone section - i doubt they will keep this going. They already have capacity for Surface/Xbox ; plus i *think* that XBOX manufacturing is outsourced to the likes of Foxconn, but Nokia was owning their own factories. I dont think MS will want to keep all of them but instead increase capacity through their outsourcing partners.

dopydope said,

Dont forget MS also bought the dumbphone section - i doubt they will keep this going. They already have capacity for Surface/Xbox ; plus i *think* that XBOX manufacturing is outsourced to the likes of Foxconn, but Nokia was owning their own factories. I dont think MS will want to keep all of them but instead increase capacity through their outsourcing partners.

They probably won't stay in the dumb phone market long but right now the Asha line does sell good, I don't think that's going to be dropped soon. We'll just have to wait and see how it goes, besides, why outsource it if you could do it yourself and for less maybe?

techbeck said,
Ouch

Well, my heart goes out to the people being cut. Hopefully they get some good severance or something for it. And, hopefully they find new jobs quickly!

But that does hurt.

George P said,

They probably won't stay in the dumb phone market long

I think Elop just answered that.
This explains a good chunk of the 12500 job cuts.

dopydope said,

I think Elop just answered that.
This explains a good chunk of the 12500 job cuts.

Yup, lots of the dumb phone people are now on the way out, S40 and so on plus they are going to close a number of factories, they got 7 of them in the Nokia deal but it sounds like they're going to keep 3 or 4 of them, so add those workers to the list.