REDMOND, Wash. — Microsoft is cutting up to 18,000 jobs, about 14 percent of its staff, over the next year as it works to cut down on management layers and integrate the Nokia devices business it bought in April.
The news this morning sent Microsoft’s stock up 3 percent in premarket trading.
Although the job cuts had been expected, the extent of them was a surprise. It’s the boldest move by CEO Satya Nadella since he took the reins from Steve Ballmer in February. In a public e-mail to employees today, he said the changes were needed for the company to “become more agile and move faster.”
Of the job cuts, about 12,500 professional and factory jobs will be cut. Microsoft expects 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.
FBR Capital Markets analyst Daniel Ives said the cuts were about double what Wall Street was expecting.
But he said they were necessary to streamline operations and clean up a bloated management structure.
Microsoft has been shifting its focus from traditional PC software to cloud computing and cloud-based products like its Office 365 productivity software.