Microsoft Announces Biggest Layoffs In Company's History

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Microsoft will eliminate 18,000 jobs in the next year. That's 14 percent of the company's global workforce, and the largest reduction in its history. The changes reflect Microsoft's shift to mobile.


NPR's Business News starts with a downsized Microsoft. Microsoft announced the biggest layoffs in its history yesterday. It's cutting 18,000 jobs worldwide over the next year - that's 14% of its workforce. The company's new CEO wants to adapt to a society and an industry increasingly dependent on mobile devices. From member station KPLU, Bellamy Pailthorp reports.

BELLAMY PAILTHORP, BYLINE: Microsoft CEO Satya Nadella took the helm of the company in February. Speaking at his first town hall meeting with employees, he hinted of big changes ahead. He told them their business does not respect tradition.


SATYA NADELLA: What it respects is innovation on a go forward basis. So it is really our collective challenge that we now need to make Microsoft thrive in a mobile first, in a cloud first world - that's the core challenge that we collectively have to face up to.

PAILTHORP: In April, Microsoft completed its acquisition of the Finnish cellphone maker Nokia. And now it says more than two thirds of the 18,000 layoffs it has announced are related to that acquisition. Most will be in Nokia's factories and offices overseas. But more than 1,300 employees in the Puget Sound region received their pink slips yesterday. Analyst Patrick Moorehead says the domestic layoffs are mostly middle managers.

PATRICK MOOREHEAD: Where people are paid to kind of check work and make sure schedules are being done and there are multiple areas of ownership that essentially slow things down.

PAILTHORP: More cuts are expected. But Gartner analyst Merv Adrian says Microsoft is simultaneously hiring new people and investing in new programs.

MERV ADRIAN: Companies need to architect themselves for the future. And I think it's much more positive for a company to be restructuring when it's strong, than having to cut when it's weak.

PAILTHORP: Wall Street seemed to agree, with Microsoft shares surging in response. For NPR News, I'm Bellamy Pailthorp in Seattle.

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