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Microsoft to slash 18,000 jobs

Microsoft is to axe up to 18,000 jobs over the next year as the US software giant begins the steepest cuts in the firm's 39-year history.

The reduction amounts to 14% of the Washington-based firm's global workforce of 127,000, with around 12,500 jobs set to go at the Nokia mobile phone unit it bought in April.

Microsoft would not say how many jobs are to go in the UK, where it employs 3,500 people at Reading, London and Edinburgh.

In the wake of a 28,000 jump in Microsoft's headcount following the Nokia deal, the software firm's chief executive Satya Nadella said it would cut factory roles and layers of management.

This is one of the first major acts by Mr Nadella who replaced Steve Ballmer as chief executive in February. Prior to that Mr Nadella had been in charge of the company's cloud and enterprise division.

Mr Nadella said in an email to all the firm's employees today "we will simplify the way we work to drive greater accountability, become more agile and move faster."

The firm said it expects charges of up to 1.6 billion US dollars (£935 million) over the next four quarters, which includes up to 800 million US dollars (£467 million) for severance and related benefit costs.

Microsoft said it would phase out phone factory operations in Hungary and would reduce engineering work at sites in Beijing and San Diego and Oulu in Finland.

The firm said it will make most of the cuts by the end of the year, and will fully complete the process by the end of June.

The cuts are far deeper than the 5,800 jobs Mr Ballmer axed in 2009.

Founded in 1975 by Bill Gates and Paul Allen, Microsoft enjoyed great success with its Windows and Office software but has been late adapting to developments elsewhere in the technology industry.

Google has become dominant in online search while iPhones, iPads and Android devices have hit the company's strength in the personal computer market.

Microsoft's attempts to manufacture its own devices have run into problems, with its Surface tablets yet to turn a profit.

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