Microsoft staff were readying themselves today for what could be the biggest job cuts in the company's 39-year history as it was reported new chief executive Satya Nadella could slash up to 6000 posts within days.
The newly acquired Nokia handsets division and parts of Microsoft that overlap with that business, as well as marketing and engineering, are likely to bear the brunt of the cuts, according to news agency Bloomberg.
Microsoft has about 127,000 staff worldwide and has seen its headcount soar by nearly a third since adding 30,000 with its Nokia acquisition.
The UK could be badly hit by the layoffs amid reports that the marketing team behind the Xbox games device, which has its European base in Reading, is under scrutiny. The company is also thought to employ close to 1,000 in its London headquarters in Victoria.
When Microsoft agreed to buy Nokia’s phone arm, the computing giant promised $600 million (£380 million) of cost savings in the 18 months after the deal closed.
Last week, Nadella told staff in a long memo that he planned to “flatten the organisation and develop leaner business processes”.
Nadella, who rose internally to succeed Steve Ballmer earlier this year, added: “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.”
He also warned: “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.”
Some industry insiders criticised Nadella for failing to explain more clearly in the memo how he planned to revive Microsoft, which has been lagging behind more agile rivals Apple, Google and Amazon in the era of mobile computing.
Jean-Louis Gassée, a venture partner with Silicon Valley firm Allegis Capital, wrote on technology news website Quartz that Nadella had written “3,100 plodding words” and that he “needs an editor”.
Microsoft’s biggest previous jobs cull came in 2009 when 5800 were axed. The company, which reports its annual results next Tuesday, began its new financial year at the start of July.