Microsoft to announce 6,000+ job losses today

By Graeme Burton
17 Jul 2014 View Comments
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Microsoft is expected to announce the loss of more than 6,000 jobs today - ahead of the unveiling of its restructuring next week - with Finland the epicentre of the job losses.

The company is expected to take the axe to the Nokia mobile phone division it acquired last year, a transaction that was only completed at the end of April. Approximately 1,000 job losses are expected in Finland as Microsoft's new CEO, Satya Nadella, seeks to reduce overlaps between Nokia and Microsoft's own Windows Phone division.

Further reading

When Microsoft acquired Nokia, it pledged to make $600m in cost cuts within the first 18 months following completion of the acquisition.

The company's Xbox division is also expected to bear the brunt of the job losses. Although Nadella praised the Xbox in a long open memo released last week, the new Xbox One has been a clear second place to the Sony Playstation 4, its main rival, since both were launched last year.

A botched launch that alienated many gamers, combined with a strategy of pitching the Xbox One as an entertainment hub, rather than a pure games machine, has been blamed for comparatively lacklustre sales.

The job losses across Microsoft are expected to exceed the 5,800 job cuts masterminded by Nadella's predecessor, Steve Ballmer, in 2009 at the height of the last recession.

It also reflects an industry-wide change, as ageing giants such as HP, IBM, Cisco Systems and even Intel report restructurings and job losses as the IT industry becomes more service-oriented.

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