Thousands of employees are about to lose their jobs at Microsoft according to a report out today.
This round of job cuts would be the biggest since 2009 which saw 5,800 employees laid off. It may even eclipse that figure as Microsoft integrates the Nokia Oyj handset unit.
Potential employees impacted would be in Nokia’s handset unit along with people in engineering and marketing divisions across Microsoft.
Marketing jobs at the global Xbox team are also said to be on the chopping block.
CEO Satya Nadella hinted at possible job cuts in a memo to employees last week promising to “flatten the organization and develop leaner business processes.” At the time, Nadella avoided specific talk of job cuts. Today’s report indicates job cuts are on the way.
Nadella is expected to go into more detail about Microsoft’s organizational and financial areas when Microsoft reports their latest quarterly results on July 22.
One area investors will be looking at is the Xbox division. Sales of the Xbox One have been good compared to the Xbox 360’s launch, but have been dwarfed by the Playstation 4. Microsoft decided to strip the Kinect and lower the price of the Xbox One to $399 as it sought price parity with the PS4. The price cut occurred in early June, so we should see some of its impact in the latest NPD report due out later this month.
Nadella said Microsoft remains committed to the Xbox One, but some investors have said Microsoft should spin the unit off or sell it.
More than 5,000 employees getting the ax sounds like a lot, but Microsoft has more than 127,000 employees after adding 30,000 following the Nokia handset acquisition. Wall Street expects jobs cut and it looks like Microsoft is about to follow through.