Microsoft Corp is reportedly set to annouce a few job cuts this week with an aim to slim down and unify Nokia Oyj's handset unit.
This will be the biggest round of job cuts in the last five years. In 2009, the company cut 5,800 jobs or about 5 percent of its workforce, at the start of the recession. The company had 1, 27, 104 employees as of 5 June, after adding nearly 30,000 in Nokia's acquisition, according to Bloomberg.
Satya Nadella, the current CEO of Microsoft, took over the company from Steve Ballmer in February and circulated a 3,105-word memo to employees promising to slim down the organization and develop naïve business processes. However he is currently tight lipped about the layoff that is likely to be announced soon.
While some of the job reduction will be in the marketing and engineering departments such as the Xbox division and among software testers, other job cuts will be from the changes Nadella is planning to make, reported Bloomberg.
"With recent chatter on the Street about potential head count reductions at Microsoft it was important for Nadella to be visible and set an optimistic tone heading into the next few months, especially on the heels of the Nokia integration," the Times of India quoted Daniel Ives, an analyst at FBR Capital Markets.
The software maker guaranteed $ 600 million in annual cost savings, when the company agreed to acquire Nokia's mobile phone business, in 18 months after the deal closes. It bought Nokia's Handset unit in September last year for $ 7.2 billion. The commitment will probably involve job cuts where the two companies will overlap, The Economic Times reported.
Nadella said he would announce more details regarding the company's earnings for its latest quarter next Tuesday, 22 July. "There will be many opportunities for me to talk more about our specific fiscal plans on the 22nd," Nadella told TOI in a telephonic interview.
The shares of the company slightly rose to $ 41.90 on Nasdaq under Nadella's leadership. Since the tech-stock fizz of 2000, Microsoft's stock hit a 14 year high last month.