Microsoft to cut 1,351 local jobs, 18,000 total

by: Associated Press, KIRO 7 Staff Updated:

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REDMOND, Wash. - Microsoft says it will eliminate up to 18,000 jobs over the next year -- the biggest in the company's history.

The company is working to cut down on management layers and integrate the Nokia devices business it bought in April.

Of the 18,000, 1,351 will be from the Puget Sound region.   That's about three percent of Microsoft’s Puget Sound workforce.  Those layoffs are in sales, marketing, and engineering.

The first 13,000 layoff notices will be made in the next six months.  

With the Nokia deal, Microsoft's employee headcount rose from about 99,000 last year to 127,000 as of last month.

Microsoft Corp. said Thursday that of the up to 18,000 jobs, about 12,500 professional and factory jobs will be cut. It anticipates 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. 

"My promise to you is that we will go through this process in the most thoughtful and transparent way possible.  We will offer severence to all employees ... as well as job transition help ... and everyone can expect to be treated with the respect they deserve for their contributions to this company, CEO Satya Nadella said in an email Thursday.

Although the job cuts had been expected, the extent of them was a surprise. It's the boldest move by Nadella since he took the reins from Steve Ballmer in February.

In a public email to employees Thursday, he said the changes were needed for the company to "become more agile and move faster."

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

With its $7.3 billion acquisition of Nokia's handset business, Microsoft has been is seeking to meld its software and hardware business into a cohesive package, similar to rival Apple. In a letter to employees, Executive Vice President Stephen Elop said the company will drive sales of its Windows Phone by targeting the lower-price smartphone market with its Lumia devices. It also plans to develop more products for the higher-end smartphone segment.

In a blog post 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 that he would give more details when Redmond, Wash.-based Microsoft reports fiscal 2014 results on Tuesday.

Prior to Thursday's announcement, the largest layoffs in company history came in 2009 when about 5,800 people were let go.

Microsoft's stock rose slightly in Thursday premarket trading.

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