Microsoft plans to slash up to 18,000 jobs

Microsoft announced a plan to cut upwards of 18,000 jobs within the next year, according to a message from CEO Satya Nadella to the company’s employees on a Thursday. These cuts would significantly reduce the tech giant’s workforce, amounting to over 14 percent of its total 127,000 employees.

The response from Wall Street to Microsoft’s job reduction was surprisingly positive. “The figure, significantly higher than the anticipated 5,000 to 6,000, is understandably surprising”, commented Kirk Materne, a technology analyst at Evercore Partners, in an interview with CNBC following the announcement.

Microsoft foresees pretax charges as high as $1.6 billion for severance and related expenses spread across the next four financial quarters due to the employee cutbacks.

“The first 13,000 reductions will begin immediately, with the majority of employees affected by the job cuts set to be notified within the next half year,” Nadella wrote in his letter. He stressed, however, that while some roles are being eliminated, new ones are also being created in strategic areas of the business.

Nadella justified the proposed cuts as a strategy to “simplify our workings to encourage greater accountability, foster agility and expedite our speed.” Furthermore, he added, Microsoft would also be streamlining its management structure.

Nearly 12,500 of the estimated job cuts will result from the company’s integration and strategic alignment with Nokia Devices and Services, according to Nadella. Microsoft had previously announced the acquisition of Nokia in September 2013.

This significant reduction is Nadella’s way of branding his leadership and direction for the company. As commented by Materne on CNBC’s “Squawk Box, Nadella is ensuring to prevent Nokia from becoming a drain on the company.”

The acquisition of Nokia’s cellphone unit earlier this year expanded Microsoft’s workforce by about 25,000 employees, including 4,700 in Finland. Globally, Microsoft’s employee count surpasses its competitors, such as Apple and Google.

Minor enhancements were applied in 2025 for readability.