Major job cuts expected at Microsoft

Nick Wingfield
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Microsoft plans to announce a major new round of layoffs as early as Wednesday, as the company seeks to further cut costs amid a shifting technology landscape.

The layoffs are in addition to the roughly 18,000 employees that Microsoft said it planned to let go a year ago, according to people briefed on the plans who asked for anonymity because the details were confidential. The new job cuts are expected to affect people in Microsoft's hardware group, among other parts of the company, including the struggling smartphone business that it acquired from Nokia last year in a $7.2 billion deal.

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At the end of March, Microsoft had more than 118,000 employees globally.

Frank X. Shaw, a Microsoft spokesman, declined to comment.

Microsoft executives have been hinting at more cutbacks for months. Satya Nadella, who became Microsoft's chief executive early last year, sent a company wide email in late June intended to rally employees for the coming year. But he also warned in the message that Microsoft will need to "make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value."

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In June, Microsoft said it was selling its online display advertising business to AOL, as the company exited a business for which it once had high hopes.

Another area in which Microsoft is stumbling is smartphones, a market in which it has continued to lose market share since acquiring Nokia's handset business. Microsoft has so far failed to turn the Windows Phone operating system, which runs on its handsets, into a vibrant alternative to the two leading mobile platforms, iOS from Apple and Android from Google.

Last month, Stephen Elop, the former chief executive of Nokia who became a senior Microsoft executive after the acquisition, overseeing its devices business, left Microsoft.

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Microsoft is not expected to leave the smartphone business in the near term given the importance of mobile devices in the technology business. The company is preparing to release a new version of its Windows operating system for PCs, smartphones and other devices, which it hopes will attract more interest from software developers.

Still, analysts have said Microsoft may soon acknowledge missteps in the smartphone business with a large write-down of the value of its Nokia acquisition. The announcement of that accounting charge, which could amount to several billion dollars, is expected by many to occur before Microsoft reports earnings this month.