Microsoft Announces Massive Layoff, Cutting 18,000 Workers

Updated from 8:46 a.m. to include thoughts from analysts throughout.

NEW YORK (TheStreet) -- Microsoft's (MSFT) new CEO Satya Nadella announced, this morning, as many as 18,000 employees will be facing layoffs in the coming year in the largest restructuring move in the company's 39 year history.

In a memo sent to all employees, Nadella said that because Microsoft had to incorporate thousands of professional and factory workers with the acquisition of Nokia's cell phone business, that Microsoft will need to restructure with the first 13,000 being eliminated by the end of the calendar year. Nadella said, "the vast majority of employees whose jobs will be eliminated will be notified over the next six months."

Previously, Microsoft's largest round of layoffs was in 2009 when it reduced its workforce by nearly 6,000 positions.

Following the announcement, Microsoft stock was gaining more than 3% to $45.49 in early New York trading.

TheStreet's Julie Cerullo has details on the layoffs:


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FBR Capital Markets analyst Daniel Ives noted that the cuts were necessary, and will allow Microsoft to become more competitive, particularly around cloud and mobile. "As expected, it appears the vast majority of the cuts will be around Nokia, while we also believe Nadella is using this as an opportunity to cull some of the non-strategic areas at the company as Microsoft needs to be a "leaner and meaner" technology giant over the coming years in order to strike the right balance of growth and profitability around its cloud and mobile endeavors," Ives wrote in an an analyst note.

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