Microsoft to Lay Off 18,000 People Under the Pretext of Restructuring

The truth is Microsoft is struggling. While Apple and IBM have just formed an alliance to handle enterprise mobility, Microsoft is finding it difficult to integrate the Nokia mobile business that it aquired with its own software offerings.

Result: Microsoft Corp. today announced a restructuring plan saying it’s simplifying its operations to align the recently acquired Nokia Devices and Services business with the company’s overall strategy.

These steps will result in the elimination of up to 18,000 positions over the next year. Of the total, about 12,500 professional and factory positions will be eliminated through synergies and strategic alignment of the Nokia Devices and Services business acquired by Microsoft on April 25.

According to Microsoft, the actions associated with the plan are expected to be substantially complete by Dec. 31, 2014, and fully completed by June 30, 2015.

The company expects to incur pre-tax charges of $1.1 billion to $1.6 billion over the next four quarters, including $750 million to $800 million for severance and related benefit costs, and $350 million to $800 million of asset-related charges.

The plans were outlined in an email from Microsoft CEO Satya Nadella (pictured above) to Microsoft employees, and an email from Microsoft executive VP Stephen Elop to Microsoft Devices Group employees.

Photo courtesy: Microsoft