Satya Nadella has confirmed in an email to Microsoft employees that the company is eyeing fresh round of layoffs in a bid to curb costs amid lackluster demand for some of the company’s mobile products and services.
The latest job cuts are in addition to the 18,000 jobs that Redmond said it planned to cut a year ago.
“Over the past few weeks, I’ve shared with you our mission, strategy, structure and culture. Today, I want to discuss our plans to focus our talent and investments in areas where we have differentiation and potential for growth, as well as how we’ll partner to drive better scale and results”, Nadella writes at the start of the letter.
“We anticipate that these changes, in addition to other headcount alignment changes, will result in the reduction of up to 7,800 positions globally, primarily in our phone business. We expect that the reductions will take place over the next several months”, he adds.
The new job cuts are will affect employees in Microsoft’s hardware group and other parts of the company, including the smartphone business that Microsoft acquired from Nokia last year in a $7.2 billion deal. The software giant had more than 118,000 employees worldwide at the end of March.
The job cut doesn’t come as a surprise as Microsoft CEO, Satya Nadella, in a recent company-wide email, had warned that the company would need to “make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value.”
Few days ago, Microsoft also reshuffled its top management team resulting in the departure of several senior executives including former Nokia CEO Stephen Elop, Microsoft Business Solutions head Kirill Tatarinov, advanced strategy chief Eric Rudder, and chief insights officer Mark Penn, the former Clinton political adviser.
Recently, Microsoft announced a deal with AOL that will see the tech giant handing over its display advertising business to the latter. As part of the deal, AOL Inc. will hire about 1,200 workers when it takes over the software giant’s web ad business.
It was also reported that online cab hailing service Uber is acquiring a part of Microsoft’s Bing Maps unit. The deal will see Uber offering jobs to about 100 Microsoft employees.