Microsoft set to lay off 18,000 people globally

This is biggest-ever job cut in 39-year history of the software giant

• The job cut accounts for 14% of its global workforce
• First layoffs after Hyd-born Satya Nadella took over as CEO
• In fact, he outlined plans for leaner business last week

Seattle: Microsoft Corporation on Thursday said it would cut up to 18,000 jobs, or 14 percent of its global workforce, this year as the software giant attempts to transform itself into a cloud-computing and mobile-friendly software company. It is also aiming to reduce the headcount at the newly acquired Nokia phone business.

The larger-than-expected cuts are the deepest in the company's 39-year history and come five months after Hyderabad-born Satya Nadella assumed charge as it Chief Executive Officer. In fact, he outlined plans for a leaner business in a public memo to employees last week.

"We will simplify the way we work to drive greater accountability, become more agile and move faster," Nadella wrote to employees in a memo made public early Thursday. "We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making."

About 12,500 of the layoffs will come from eliminating overlaps with the Nokia unit, which Microsoft acquired in April for $7.2 billion. Microsoft did not say how many jobs would come from Nokia and how many from existing operations. The acquisition of Nokia's handset business in April added 25,000 people to Microsoft's payroll.

The Nokia-related cuts were widely expected. Microsoft said when it signed the deal that it would cut $600 million per year in costs within 18 months of closing the acquisition.

However, Microsoft did not reveal exactly where the remaining jobs would be cut, but said the first wave of layoffs would affect 1,351 jobs in the Seattle area in the US. The proposed layoffs are the biggest at the Redmond, Washington-based company since Ballmer axed 5,800, or about 6 per cent of headcount at the peak of global recession in early 2009.

The new CEO's moves are aimed at helping Microsoft shift from being a primarily software-focused company to one that sells online services, apps and devices which will make people and businesses more productive. It is widely believed that Nadella needs to make Microsoft a stronger competitor to Google Inc and Apple Inc, which have dominated the new era of mobile-centric computing.

Marking this change of emphasis, Nadella last week rebranded Microsoft as the ‘productivity and platform company for the mobile-first and cloud-first world’.

However, the software giant is not alone in cutting the jobs. Hewlett-Packard, the global PC maker, has embarked on three-to-five-year plan that aims at cutting its headcount by 50,000 from its global staff of 250,000. Another IT giant IBM is also trying to rebalance its workforce, which is expected to lead to 13,000 job cuts or about 3 per cent of its staff.

Chipmaker Intel Corp and network equipment maker Cisco Systems Inc also said they would reduce their headcount by five per cent.