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Microsoft cuts 18,000 jobs

By By David Goldman
Published On: Aug 06 2014 09:47:42 AM CDT
Updated On: Jul 17 2014 07:45:24 AM CDT
Microsoft

CNN

NEW YORK (CNNMoney) -

Microsoft CEO Satya Nadella wasn't kidding -- he really is making bold changes.

The software giant said it would cut 18,000 jobs within the next year -- about 14 percent of the company's 125,000 employees. That's by far the largest round of layoffs in the company's history.

The previous record came during the lowest point of the Great Recession, when Microsoft cut more than 5,000 jobs in 2009 -- the first mass layoff in the company's history.

Most of the latest round of layoffs -- 12,500 -- will come from Nokia's devices and services business that Microsoft recently bought. In a memo to Microsoft's staff, Nadella said that Microsoft found many redundancies between the two companies, including both professional and factory workers.

But Microsoft is also cutting 5,500 other jobs at the company. That's part of the company's new strategy, which Nadella outlined in a separate memo to employees last week. In that note, Nadella said that Microsoft would focus intently on improving its mobile and cloud productivity software, including Office 365, Windows Phone, Windows Azure, Skype, OneDrive and Bing.

Nadella said Microsoft was in need of a "culture change." Microsoft's rivals, including Google, Apple and Amazon, have in many ways beaten Microsoft at the mobile and cloud game in recent years.

"First, we will simplify the way we work to drive greater accountability, become more agile and move faster," Nadella said. " As part of modernizing our engineering processes the expectations we have from each of our disciplines will change."

Many of the job cuts will come from the management ranks, as Nadella pledged to have fewer layers of "top-down and sideways" oversight "to accelerate the flow of information and decision making."

As the company cuts jobs, Nadella noted Microsoft will be hiring as well in those "strategic areas" that he laid out last week.

Nadella said the first 13,000 job cuts would come in the next six months.