Microsoft Corp. is reportedly preparing to announce layoffs this week. Sources say the job cuts might exceed the company's record from 2009, when 5,800 employees were let go.
According to Bloomberg, the job cuts will probably affect Nokia and Microsoft divisions that have overlapping responsibilities as it seeks to integrate Nokia's handset unit into its domain.
Microsoft acquired Nokia's handset unit in September of last year and promised to save $600 million in annual costs 18 months after the deal. Sources said the savings will come from job cuts that will happen in overlapping departments. Microsoft CEO Satya Nadella sent out a memo on Friday discussing upcoming changes within the company.
"Over the course of July, the senior leadership team and I will share more on the engineering and organization changes we believe are needed," Nadella wrote in the memo. "Nothing is off the table in how we think about shifting our culture."
Sources added that the job cuts are slated to stem from Nadella's engineering re-organization, since new methods of software development require the developers themselves to be testers for bugs and other problems. This calls for fewer people than the traditional system, in which teams of engineers involve program managers, developers and testers.
Nadella declined to comment about the job cuts, but promised to provide more details regarding the implications of his latest memo when the company reports its fiscal fourth-quarter earnings.
Microsoft currently has 127,104 employees including those they absorbed from Nokia. GigaOM reported about 10 percent of the employees might be affected by the job cut.
Microsoft will join the string of layoffs in the technology industry if the reduction happens. Hewlett-Packard Co. plans to reduce its workforce by another 16,000 on top of the current 34,000 employees who lost their jobs. The decision was made after a continual decline in sales for 11 quarters straight.
