Microsoft to Cut Thousands of Jobs, Xbox Division Will Be Hit

Microsoft plans to lay off thousands of employees in the coming weeks in the biggest job culling since 2009. Bloomberg reports that the cuts will come from the engineering and marketing departments, and will focus more on the recently acquired Nokia side of the business.

In 2009, Microsoft laid off 5,800 people, or five percent of its workforce, in one of the company’s biggest firings ever, and the new cuts will be more substantial this time around. Microsoft employs around 127,000 people, 30,000 of which came over when Microsoft acquired the Nokia smartphone business for $7.2 billion in early June.

The Xbox division, which has been rumored to be for sale, will not be protected as massive cuts to its global marketing and software testing departments worldwide are expected. Microsoft recently tried to assuage fears of the sale of the Xbox division, even as investors, and even founder Bill Gates, have publicly addressed it.

In a release sent out last week to employees, new Microsoft CEO Satya Nadella outlined what the struggling company hopes to do going forward.

“Nothing is off the table in how we think about shifting our culture to deliver on this core strategy. Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed. Tired traditions will be questioned. Our priorities will be adjusted. New skills will be built. New ideas will be heard. New hires will be made. Processes will be simplified. And if you want to thrive at Microsoft and make a world impact, you and your team must add numerous more changes to this list that you will be enthusiastic about driving.”

C|Net reports that between five and ten percent of Microsoft’s employees will soon get pink-slips as the company looks to streamline itself in the face of new technologies and new innovations. The cuts are expected to align with the July 22 quarterly earnings report.

According to the Seattle Times, Chief Financial Officer Amy Hood has told investors that Microsoft will cut more than $600 million worth of expenses. In the face of drastic changes, and the loss of what looks to be tens of thousands of jobs, Microsoft is trading at just over $42 a share (at the time of this writing) and is up 13 percent for the year.

Hewlett-Packard recently cut 50,000 total jobs, with 16,000 jobs lost in May, which is 14 percent of its global workforce since Meg Whitman took over three years ago. The job cuts have not stopped HP from its downslide.

The Microsoft job cuts could come as early as this week, and the mass lay-offs should be completed before July 22.

[Image Courtesy of Technobuffalo.com]