Just ahead of the July 22 earnings call, and a week after Satya Nadella's email missive, in which he explains that hard decisions were forthcoming and that nothing was off the table, Microsoft's CEO is announcing a significant reduction in the company's workforce.
Entitled, Starting to Evolve Our Organization and Culture, today's letter explaining the layoffs states that 18,000 jobs will be cut over the course of the coming year, with 13,000 positions eliminated immediately. The Nokia Devices and Services acquisition will account for 12,500 of those jobs.
Satya explains that the workforce reduction is driven by two outcomes: work simplification as well as Nokia Devices and Services integration synergies and strategic alignment.
Part of the Nokia Devices and Services strategic alignment means that the Nokia X, rumored to deliver running Android with Microsoft branding, is dead. The Nokia X product will be redeveloped to run Windows instead. That pretty much kills all speculation about Microsoft's forward momentum with Android as part of the overall equation.
The layoffs are expected to be finished by the end of fiscal year 2015 (ends June 2015), and will result in a $1.1B-$1.6B charge. $750M-$800M of that total will be related to severance and other benefit costs, and $350M-$800M will be tied to asset-related charges.
This story is still developing as the Senior Leadership Team at Microsoft is expected to share its vision for the new organization later today.
