Microsoft Cuts Nearly 5,000 Jobs in Major Restructuring Plan

Microsoft has announced that it is cutting 2,850 jobs in addition to the 1,850 jobs it announced would cut in May 2016, leading to 4,700 people in total being made redundant by the tech giant. 

In a filing with the US Securities and Exchange Commission, Microsoft revealed major restructuring plans that are set to take place before the end of the 2017 fiscal year. The company wrote (via The Inquirer): “We periodically evaluate how to best deploy the company’s resources. In the fourth quarter of 2016, management approved restructuring plans that would result in job eliminations, primarily across our smartphone hardware business and global sales.

“In addition to the elimination of 1,850 positions that were announced in May 2016, approximately 2,850 roles globally will be reduced during the year as an extension of the earlier plan, and these actions are expected to be completed by the end of fiscal year 2017.

“In connection with the restructuring plans, we incurred restructuring charges of $501m in fiscal year 2016, including severance expenses and other reorganisation costs. We do not expect to incur additional charges for these restructuring plans in subsequent years.”

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Microsoft CEO Satya Nadella. (Image Credit: Justin Sullivan / Getty Images)

The cuts are an example of Microsoft continuing to whittle down its position in the smartphone market, with the company’s acquisition of Nokia back in 2014 now being almost completely nullified. The astonishing $7.1 billion Nokia deal was deemed a huge mistake by Microsoft’s CEO Steve Ballmer, with current CEO Satya Nadella having to make major changes to the company in order to recuperate the losses they suffered as a result. 

Now Microsoft is looking at bolstering its sales division while simultaneously slowing down on its smartphone business, leading to an unfortunate number of jobs being lost throughout the next two years. It is hoped that the restructuring plan will be completed by the end of 2016.

Top Image Credit: Stephen Lam / Getty Images