Microsoft Corporation (MSFT) May Announce Biggest Job Cuts In History-Report

Microsoft Corporation (NASDAQ:MSFT) is planning massive cut in the employee count, which will be the biggest in five years, as the software giant works ways to integrate  and streamline the Nokia Oyj handset unit, according to Bloomberg, citing people with knowledge of the company’s plans.

Announcement may come soon

Bloomberg has informed that the company might announce its plan of shedding employees in the current week itself. It is very much likely that the employees required to sacrifice their jobs would be the ones working for Nokia-Microsoft overlapping divisions and probably those employed in the marketing and engineering divisions. The negative impact would be majorly on the software testers and marketing for businesses along with the Xbox team, says the report.

Microsoft will announce its quarter-four earnings and other financials on the 22nd of July, and it expected to discuss further on this topic, then.

Cost cutting in line with Microsoft plans

The CEO promised to its employees that he will “flatten the organization and develop leaner business processes” through a memo that was sent last week. The biggest job cut undertaken by Microsoft was that of 58,000 employees in the year 2009 and this is going to be even bigger than that, making this restructuring the largest in the company’s history, claim the sources. Prior to this, at the beginning of the recession, the company had started a round of job cuts, when it got rid of nearly 5% of its employees.

Microsoft Corporation (NASDAQ:MSFT) acquired Nokia Oyj’s handset manufacturing business in April, and this came at the cost of $7.2 billion, which was way less than $8.5 billion Microsoft paid for acquiring Skype in 2011. With this purchase Microsoft hopes to fuel a new life into its smartphone business.

The current employee count of Microsoft Corporation (NASDAQ:MSFT) is estimated at 127,000 (far more than rivals Apple and Google), which includes around 30,000 employees from Nokia handset business that it acquired last year, in September. After incurring around $7.2 billion on acquisition the company had planned to save $600 million in the time period of next 18 months, which it aims to achieve through cutting costs largely.