Sources who have information on Microsoft's plans are saying job cuts are imminent as CEO Satya Nadella takes control.
Confirmation can come as soon as within the week and it's expected to be the biggest round in five years since Microsoft laid off 5,800 employees in 2009 at the start of the recession. Nadella took over the spot of CEO from Steve Balmer in February and had just issued his first memo last week addressing the Microsoft community.
"The day I took on my new role I said that our industry does not respect tradition - it only respects innovation. I also said that in order to accelerate our innovation, we must rediscover our soul - our unique core. We must all understand and embrace what only Microsoft can contribute to the world and how we can once again change the world. I consider the job before us to be bolder and more ambitious than anything we have ever done," starts Nadella in his memo.
The CEO adds July will be a month of dialogue involving the company's core focus and bold ambition, highlighting the need for cultural changes in order to deliver changes that would embody the new direction Microsoft is about to take. More information about Microsoft's plans for the future are expected to be revealed on July 22 when Nadella reports on the company's quarterly earnings.
After Microsoft absorbed Nokia's handset business, the company registered 127,104 employees, a number that surpasses Google Inc. and Apple Inc. Roughly 25,000 of that number represents individuals from Nokia.
As a streamlining effort, the job cuts are expected to happen where products and services from Microsoft and Nokia overlap, including engineering and marketing. Analysts estimate that Microsoft can save around $1 billion by reducing 25 percent off of its Nokia business.
When this latest round of job cuts is finalized, Microsoft will be joining the line of technology companies looking to cut back on expenses by trimming jobs. Hewlett-Packard announced in May that it will be making more cuts as the company logged declining sales for the 11th straight quarter. Up to 16,000 jobs will be cut on top of the 34,000 that have already been eliminated, said HP CEO Meg Whitman.
Microsoft is also in talks with Aorato, an Israeli security firm, hinting at the direction that the company wishes to take with Nadella's guidance.
