News

Report: Microsoft Layoffs To Enter Second Phase This Week

• By Kurt Mackie
• September 17, 2014

The second round of Microsoft's planned 18,000 job cuts -- the largest layoffs in the company's history -- will reportedly take place on Thursday, Sept. 18.

Citing unnamed sources "close to the company," longtime Microsoft reporter Mary Jo Foley reported on Tuesday that the cuts are expected to affect all groups across the company, though it isn't clear how many employees would be laid off in this round.

Microsoft first announced the layoffs in July under the supervision of recently appointed CEO Satya Nadella. The estimated 18,000 job cuts are larger than a record cut of 5,000 jobs that then-CEO Steve Ballmer had announced back in 2009. Ballmer at that time cited the overall down economy as the reason for those cuts.

In a letter to employees announcing the July layoffs, Nadella suggested that they were part of an overall realignment effort at Microsoft. He indicated that 13,000 of the cuts would come over the next six months. Most of those cuts -- about 12,500 employees -- were expected to come from Microsoft's newly acquired Nokia personnel, it was said. Microsoft had acquired about 25,000 Nokia employees after buying the smartphone maker in April for about $7.2 billion.

Microsoft's fact page currently lists a total of 128,076 Microsoft employees worldwide, but that statistic is dated from June 30, 2014. It seems Microsoft may be aiming to trim its size down to around 110,000 employees by the end of this current wave of job cuts.

The job cuts appear to be a signal to investors, rather than cost-cutting due to company finances. Microsoft had a net $22 billion income in its fiscal-year 2014, according to its annual 10-Q report. Microsoft may be aiming to please investors, who tend to favor job cuts for profitable companies, regardless of the reasons for those cuts.

Another investor-pleasing move is Microsoft's announcement on Tuesday that its board of directors has issued a quarterly dividend of $0.31 per share, which will be payable on Dec. 11, 2014.

Microsoft also announced some board-member changes. Newly appointed to Microsoft's board are Teri List-Stoll, executive vice president and CFO of Kraft Foods Group, and Charles W. Scharf, CEO of Visa. Both List-Stoll and Scharf will join the board on Oct. 1, bumping up the board to 12 members. List-Stoll will be part of the audit committee, while Scharf joins the "governance and nominating committee," according to Microsoft's announcement.

Two members of the board also announced their retirements. Dave Marquardt, general partner at August Capital, and Dina Dublon, former CFO at JPMorgan Chase, will end their stints on Microsoft's board after Microsoft's annual shareholder meeting in December. Marquardt has served on Microsoft's board since 1981. Dublon has served on the board since 2005.

Microsoft's stock recently has hit a record high. It traded at $46.76 on Tuesday, down slightly by $0.07 per share in after-hours trading, according to Yahoo Finance.