Microsoft is planning to announce major job cuts as it searches for further cost cuts owing to a change in the overall tech environment. The Redmond-based firm may announce the job cuts as early as Wednesday, claims a report from The New York Times.
Microsoft hinting at layoffs
Citing people briefed on the plans, the report says that the layoffs will be in addition to the 18,000 job cuts that the tech firm announced last year. It is expected that the new layoffs will affect Microsoft’s hardware group and other departments, including the business it acquired from Nokia last year for $7.2 billion.
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Satya Nadella, who was appointed CEO early last year, has been hinting about more layoffs for months. In an email sent to employees in June, Nadella warned that the company needs to make some tough choices in struggling areas and “solve hard problems in ways that drive customer value.”
In June, Microsoft exited a business for which it once had high hopes, selling its online advertising business to AOL. Globally, Microsoft had more than 118,000 employees at the end of March. As of now, there has been no comment on the matter from Microsoft.
Will Microsoft exit the mobile business?
Another area that uncertain for Microsoft is smartphones. Since the company acquired Nokia’s handset business, it had been continuously losing market share. The tech firm has failed to turn its Windows Phone operating system into an alternative for the two leading mobile platforms, Apple’s iOS and Google’s Android.
Also Nokia’s former CEO Stephen Elop, who become a senior Microsoft executive after the acquisition, left the firm last month. Despite the hardships, it is largely believed that Microsoft will not leave its smartphone business owing to the importance of mobile devices in the tech world today. Microsoft is about to release a new version of its OS for PCs, smartphones and other devices in hopes of attracting more developers and users.
According to analysts, Microsoft will soon realize its mistake in the smartphone business by writing down the value of its Nokia acquisition, which could amount to a billion dollars. And there are good chances that the accounting charge for Nokia takes place before the tech firm releases its earnings this month.