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Microsoft Slashing Up to 18,000 Jobs, Its Biggest Layoff Ever

Tech giant to take restructuring charge of $1.1 billion to $1.6 billion, with most cuts resulting from Nokia acquisition

Microsoft said it will eliminate up to 18,000 jobs over the next year, with the bulk of the cuts coming from its acquisition of mobile-devices maker Nokia.

The technology giant said the layoffs — representing about 14% of its workforce, the largest round of cuts in its history — will “simplify its operations” and align the Nokia business with the rest of the company. Of the total cuts, about 12,500 professional and factory positions will be eliminated through “synergies and strategic alignment” of the Nokia Devices and Services business. Microsoft closed the $7.2 billion acquisition of Nokia in April.

Microsoft’s stock rose 2.8% in in pre-market trading Thursday, to $45.31 per share, the highest it has been in more than 10 years.

Microsoft said it expects to take 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, as well as 350 million to $800 million of asset-related charges. The Redmond, Wash.-based company said most layoffs will be complete by Dec. 31, 2014, and fully completed by June 30, 2015.

In a memo to employees, Microsoft CEO Satya Nadella — who was named to the top post this February — said, “The first step to building the right organization for our ambitions is to realign our workforce.”

The layoffs will let Microsoft “drive greater accountability, become more agile and move faster,” Nadella told employees. “My promise to you is that we will go through this process in the most thoughtful and transparent way possible.”

Previously Microsoft’s biggest round of layoffs occurred in 2009, when it eliminated 5,800 positions.

Microsoft posted Nadella’s full memo here. A memo from Microsoft Devices Group EVP Stephen Elop, formerly president and CEO of Nokia, is available here.

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