Microsoft braces for more job cuts

Photograph by Stephen Lam — Getty Images

Don’t be surprised if Microsoft announces layoffs soon as it clears the decks for fiscal year 2016 starting July 1.

There are already signs of a slim down, but so far it’s been a nip and tuck here and there. On Monday, the company said it is selling its ad placement business to AOL (AOL), offloading 1,200 positions in that process. And, it is transferring part of Bing’s mapping business (and another 100 positions) to Uber.

But smart money is that Microsoft (MSFT) will be chopping more jobs, mostly from the mobile phone ranks. The phone business was folded into a new Windows and Devices unit under Terry Myerson in a reorg two weeks ago, with former Nokia CEO Stephen Elop exiting at that time.

Recall too how, at this time last year, unconfirmed reports of impending layoffs surfaced. The following week, CEO Satya Nadella sent a memo about the company’s strategic direction with mention of unnamed-but-fundamental-cultural changes needed to achieve it.

The next week: boom! A plan to cut 18,000 people in the course of the year. That was the largest downsizing in the company’s history but was not a total surprise given that Microsoft picked up 25,000 employees in its $7 billion acquisition of Nokia’s struggling phone business.

So will history repeat itself? In an internal memo that leaked last week, Nadella talked about tough choices to come, so folks are on edge in Redmond.

The most recent headcount on Microsoft’s web site from June 2014 lists 128,000 employees; others estimate that current employee count is at about 118,000, which does not represent a net loss of 18,000 jobs. That’s probably because, much to Wall Street’s chagrin, Microsoft kept hiring in strategic areas, while culling people from less, um strategic areas.

Microsoft had no comment for this story.

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