Microsoft Layoffs Greater Than Expected: Up to 18,000 Jobs Being Cut

The company's widest layoffs ever focus on Nokia, but will also affect Xbox.

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Update: It may not be the only effect on he Xbox business, but we now know these layoffs will result in the closure of Xbox Entertainment Studios, the company's branch focused on developing original video programming. However, the in-development Halo projects, Halo: Nightfall and the Halo TV series, will go on as planned.

Original Story: It was reported earlier this week that massive layoffs at Microsoft would soon be announced, and it turns out they are even bigger than expected. The company announced today it will cut "up to 18,000 jobs in the next year," the vast majority of which come as a result of last year's acquisition of the Nokia mobile phone business.

Microsoft CEO Satya Nadella. Photo credit: CNET
Microsoft CEO Satya Nadella. Photo credit: CNET

In a memo entitled "Starting to Evolve Our Organization and Culture," CEO Satya Nadella announced the effects of the company's new vision that was outlined last week. About 12,500 of the layoffs will come from the Nokia Devices and Services unit, and includes both professional and factory workers. Microsoft is "moving now" to lay off about 13,000 employees, who will receive the news sometime in the next six months.

When word of layoffs were reported earlier this week, it was said that marketing positions in the Xbox division would be affected. Nadella's memo makes no mention of Xbox, although--amidst continued speculation that the division could be sold off--he did offer a showing of support for the platform when outlining his vision for the company last week. ZDNet reports the Xbox division is indeed affected, but offered no additional details. We've contacted Microsoft for comment and will report back with anything we learn.

Nadella notes that the company will be adding jobs "in certain other strategic areas," and that affected employees will be given severance and job transition help. "[E]veryone can expect to be treated with the respect they deserve for their contributions to this company," he wrote.

The 18,000 total cuts represent the largest in company history. Microsoft employed 127,104 people as of June 5, making this about a 14 percent reduction.

More details on the layoffs should be made available in the coming days as employees are briefed and Nadella holds his monthly Q&A event tomorrow. Investors responded to the news positively at first, as the company's stock price opened today at $45.45 per share, up from $44.08 at close yesterday. It has since fallen, and currently sits at $44.43 as of this writing.

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