Microsoft Corp.’s share price up, to cut 18 000 employees as CEO Nadella seeks to restructure the company

Microsoft Corp. announced that it intends to cut as many as 18 000 job positions, in what is considered the largest round of cuts in its history. The job cuts come at a moment when the Chief Executive Officer of Microsoft – Mr. Satya Nadella is putting his efforts into incorporating Nokias handset unit and narrowing the software production business.

The CEO Mr. Nadella wrote in a note to the employees of the company, which was cited by the Financial Times: “The first step to building the right organisation for our ambitions is to realign our workforce.”

The staff reduction represents about 14% of the total workforce of the company. About 12 500 positions in the Nokia plant, as well as some professional positions are included in the lay-offs, which are equal to about half the number of workers added to Microsofts workforce thanks to the Nokia handset unit takeover.

As the Chief Executive Officer of the company Mr. Nadella explained, about two-thirds of the lay-offs are planned to come from the phone and tablet staff of Microsoft. The companys CEO is trying to improve the condition of the company after being forced to deal with the legacy of his successor Mr. Ballmer. About 5 000 jobs outside the Nokia unit, which are equal to nearly 5% of the companys workforce, are planned to be eliminated.

The news of the jobs reduction provoked a harsh reaction in Finland. As reported by the Financial Times, the Finance Minister of the country – Antti Rinne commented the companys decision with certain disappointment: “It can be said that we have been betrayed. When the deal was made, Microsoft gave the impression it was committed to Finland and Finnish knowhow. Now it seems it’s not going to be that way.”

Microsoft Corp. was 1.02% up to close at 44.53 dollars per share yesterday, marking a one-year change of +24.59%. According to the information published on CNN Money, the 27 analysts offering 12-month price forecasts for Microsoft Corp. have a median target of 43.10, with a high estimate of 50.00 and a low estimate of 34.00. The median estimate represents a -3.21% decrease from the last price of 44.53.