TECH

Microsoft Axes 18,000 Jobs

17/07/2014 14:35 BST | Updated 17/07/2014 15:59 BST

Microsoft has announced that it will axe 18,000 jobs over the next year marking the largest single set of redundancies at the company since it started 39 years ago.

The bulk of the cuts will come from Microsoft's recent acquisition of Nokia, with 12,500 professional and factory positions being axed.

It also cancelled the Nokia 'X' Android phones line, which was aimed at capturing emerging markets and only launched in March.

Microsoft plans to complete the process by June 30 2015, with the entire cutbacks looking set to cost the company around $1.6 billion in one-off charges over the next four quarters.

Microsoft currently employs around 127,000 people globally, and has around 3,500 staff in the UK.

In a public email to staff Stephen Elop, Microsoft Executive Vice President outlined the changes that would be taking place:

"We expect these changes to have an impact to our team structure. With our focus, we plan to consolidate the former Smart Devices and Mobile Phones business units into one phone business unit that is responsible for all of our phone efforts."

"We plan that this would result in an estimated reduction of 12,500 factory direct and professional employees over the next year. These decisions are difficult for the team, and we plan to support departing team members’ with severance benefits."

The reaction online has been a mixture of shock -- the cuts were expected to be around 6,000 staff -- and anger.

"In addition to the portfolio already planned, we plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices," said Stephen Elop, executive vice president at Microsoft, "We expect to make this shift immediately while continuing to sell and support existing Nokia X products."

The decision comes a week after a long-winded and heavily criticised email sent by Nadella to the Microsoft staff, in which he outlined the firm's new focus on cloud services.