Microsoft’s plans to reduce its workforce by 18,000 jobs over the next year could mean scores of engineering jobs at Nokia’s office in San Diego will be the chopping block, according to a report.
The software giant aims to downsize about 14 percent of its workers, which is set to include both factory and professional jobs, but about 12,500 of the layoffs are expected to come from the Nokia mobile phone unit that Microsoft acquired three months ago, the Los Angeles Times reported.
The mass layoff aimed at cutting management layers will be the broadest in Microsoft’s 39-year history, according to reports. The tech giant founded by Bill Gates employs 125,000.
Prior to the Nokia merger, which the company said would lead to $600 million in annual savings, Microsoft had about 99,000 workers.
The New York Times reported the Microsoft CEO Satya Nadella sent a message to employees last week that strongly hinted at an upcoming re-organization.
According to Forbes.com, the layoff plan will help Nadella shift the company from former CEO Steve Ballmer’s production of devices and services to his vision of bolstering Microsoft’s focus on platforms and productivity.
Reports also indicate that the company will be forced to spend about $1 billion on severance and benefit costs for those let go.
The stock market responded well to speculation about the upcoming layoffs, according to Business Insider, Microsoft (MSFT-NASDAQ) rose to a 14-year high Wednesday, nearing $45 a share. It had fallen below $28 late last year.
Microsoft’s last mass cutback of nearly 6,000 jobs five years ago was due to economic conditions, the reports said.
– City News Service contributed to this report.