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Microsoft announces largest layoff ever

Thursday, July 17, 2014 - 02:26

Microsoft plans to let go of up to 18,000 employees, mostly tied to its acquistion of Nokia's mobile handset unit, as the tech giant tries to adapt quicker to changing tastes in the tech world. Lily Jamali reports.

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Eighteen thousand jobs. Microsoft announcing those cuts Thursday - in what amounts to 14 percent of its workforce, the deepest layoffs in its nearly 4-decade history. Most of the cuts are linked to Nokia, which Microsoft acquired in April for its handset business as it moved deeper into smartphones. Last week, CEO Satya Nadella - on the job five months - sent a memo to employees saying Microsoft would need to move faster and more efficiently. Lance Ulanoff is Chief Correspondent and Editor-at-Large at Mashable. SOUNDBITE: LANCE ULANOFF, CHIEF CORRESPONDENT AND EDITOR-AT-LARGE, MASHABLE (ENGLISH) SAYING: "He kind of gave a hint that there was going to be pain involved here. So here comes the pain." SOUNDBITE: LILY JAMALI, REPORTER, REUTERS TV (ENGLISH) SAYING: "Wall Street welcomed the news. Microsoft stock popped in early trading Thursday to its highest level since the dot-com boom in the early 2000s." Ulanoff says the move shows Nadella's commitment to running a leaner operation than his predecessor, Microsoft lifer Steve Ballmer. SOUNDBITE: LANCE ULANOFF, CHIEF CORRESPONDENT AND EDITOR-AT-LARGE, MASHABLE (ENGLISH) SAYING: "They wanted whoever was in, to not only understand the company and the strategy but be willing to make tough decisions. Satya's proved that he can." Mobile has been a tough segment to crack. Ulanoff says the Windows phone - competing with iOS and Android - holds promise: SOUNDBITE: LANCE ULANOFF, CHIEF CORRESPONDENT AND EDITOR-AT-LARGE, MASHABLE (ENGLISH) SAYING: "They're beautiful - they work. Super consistent. Easy to use. Has the apps you want." But with just 3 to 4 percent marketshare, the Windows phone has a long way to go. Ian Fogg is a Technology analyst at IHS. SOUNDBITE: IAN FOGG, SENIOR PRINCIPAL ANALYST, IHS (ENGLISH) SAYING: "Now what this means, I think, is that in the Microsoft world view, mobile first doesn't mean you need a massive hardware business. You need a hardware business, not a massive one, and that's why so many heads are being cut in Nokia's hardware divisions." With Microsoft earnings coming out next week, analysts say revealing the cuts ahead of time reinforces the company's laser focus on its mobile-first/cloud-first strategy. SOUNDBITE: IAN FOGG, SENIOR PRINCIPAL ANALYST, IHS (ENGLISH) SAYING: "I think from a product strategy perspective on where they are in the mobile market, it's a necessary move, but it's not a wonderful news day for Microsoft. It just reflects the weak position they find themselves in the market today." And with Finland-based Nokia bearing the brunt of the cuts, the E.U. is likely to take a close look at Microsoft's move.

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Microsoft announces largest layoff ever

Thursday, July 17, 2014 - 02:26