Ireland set to escape Microsoft job cuts

It is believed that only a handful of positions at Microsoft’s Irish operations will be affected by the decision to cut 18,000 staff from its 127,000 worldwide workforce.

It announced yesterday that it will cut 14% of its workforce this year, as it trims its newly acquired Nokia phone business and tries to transform into a cloud-computing and mobile-friendly software company.

The company declined to provide any breakdown of which countries would be affected.

Microsoft employs just under 2,000 people in Ireland, but it is believed that as few as five jobs will be affected by the restructuring.

The larger-than-expected cuts are the deepest in the company’s 39-year history and come five months into the tenure of chief executive Satya Nadella, who outlined plans for a “leaner” business in a public memo to employees last week.

“We will simplify the way we work to drive greater accountability, become more agile and move faster,” Mr Nadella wrote to employees in a memo made public yesterday.

“We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.”

The size of the cuts were welcomed by Wall Street, which viewed Microsoft as bloated under previous CEO Steve Ballmer, topping 127,000 in head-count after absorbing Nokia earlier this year.

“This is about double what the street was expecting,” said Daniel Ives, an analyst at FBR Capital Markets. “Nadella is clearing the decks for the new fiscal year. He is cleaning up part of the mess that Ballmer left.”

About 12,500 of the layoffs will come from eliminating overlaps with the Nokia unit, which Microsoft acquired in April for $7.2bn (€5.3bn).

Microsoft did not say how many jobs would come from Nokia and how many from existing operations. The acquisition of Nokia’s handset business in April added 25,000 people to Microsoft’s payroll.

The Nokia-related cuts were widely expected. Microsoft said when it struck the deal that it would cut $600m per year in costs within 18 months.

Microsoft did not detail where the remaining jobs would be cut, but said the first wave of layoffs would affect 1,351 jobs in the Seattle area.

The company said it expects to take pre-tax charges of $1.1bn to $1.6bn over the next four quarters to cover the cost of layoffs.

The new CEO’s moves are designed to help Microsoft shift from being a primarily software-focused company to one that sells online services, apps and devices it hopes will make people and businesses more productive.

Mr Nadella needs to make Microsoft a stronger competitor to Google and Apple, which have dominated the new era of mobile-centric computing.

— Additional reporting Reuters


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