Round two of Microsoft layoff expected Thursday

Job cuts will hit nearly all divisions later this week in the second wave of the company's larger plan to cut 18,000 employees, sources tell ZDNet.

Mary Jo Foley

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network.

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Mary Jo Foley

Sept. 16, 2014 2:24 p.m. PT

2 min read

Microsoft CEO Satya Nadella has to deliver bad news this week. James Martin/CNET

Later this week, Microsoft will lay off another group of employees as part of its planned cuts of 18,000 announced back in July, according to sources close to the company.

Microsoft officials said in July that the company would be realigning its worldwide workforce by cutting 18,000 jobs, with 12,500 of those cuts coming from employees Microsoft acquired as part of its acquisition of Nokia's handset and services business. Microsoft officials said the layoffs would happen over the course of several waves. Microsoft officials said 1,351 of the first round of employees cut would be based in the Redmond, Wash., area.

Microsoft cut 13,000 employees total in the first wave back in July. That wave included some, but not all, of the former Nokia employees, my contacts say. It also included employees in the Operating Systems Group and just about every other group across the company. Microsoft also is planning to reduce its dependency on "contingent" (non full-time) employees by 20 percent as part of its realignment.

I am not sure how many will be cut in this week's round, which I've heard will be announced internally this Thursday. But I do hear that the second round of cuts will span across almost every group at the company. I've also heard there still will be more cuts happening as part of the original 18,000 total at further dates in the future. CEO Satya Nadella told employees back in July that the "vast majority" of the 18,000 cuts would happen over a six -month period (July 2014 to January 2015).

I asked Microsoft officials for comment about this week's alleged round of cuts and was told by a spokesperson the company had no comment.

As of mid-July 2014, Microsoft had more than 125,000 full-time employees on its payroll, a number that included the 25,000 employees it acquired as part of its Nokia acquisition.

As a result of the layoffs, Microsoft officials said the company would incur pre-tax charges of $1.1 billion to $1.6 billion for severance and related benefits costs and asset related charges over the next four quarters.

Microsoft's last major round of layoffs occurred in 2009, when management eliminated 5,800 positions over the course of two-plus rounds. Then CEO Steve Ballmer attributed the cuts in 2009 to a "response to the global economic downturn."