Microsoft is cutting jobs to make room for Nokia deal

By Peter MacArthur 2:38pm, July 18, 2014 - Updated 4:49pm, July 18, 2014
Microsoft says it will eliminate up to 18,000 jobs over the next year as it works on integrating the Nokia devices business it bought in April.

With the Nokia deal, Microsoft's employee headcount rose from about 99,000 last year to 127,000 as of last month.

Standard and Poor's analyst Scott Kessler says Microsoft is resizing its Nokia division while the market is changing.

"This is not a deal that Microsoft's current CEO Satya Nadella agreed upon or negotiated, or perhaps really wanted, and then secondly it seems like the market has changed pretty significantly over the last year or so," Kessler said.

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Media and technology expert Shelly Palmer says it's too soon to know the specifics of Microsoft's plans, but the company clearly has its eyes on the future.

"This is a really good sign. What it says is that they're completely aware of what's happening in the world; they understand where software's moving, they understand where hardware is moving, and they know they need to adapt. This is nothing more than that," Palmer explained.

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Microsoft says about 12,500 professional and factory jobs will be cut. It anticipates charges of $1.1 billion to $1.6 billion over the next four quarters, which includes $750 million to $800 million for severance and related benefit costs.

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