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Microsoft reportedly readying job cuts in Nokia acquisition

A rumored round of job cuts could be the largest in the software giant's history, sources tell Bloomberg.

Microsoft headquarters, Attkisson piece
Microsoft headquarters in Redmond, Wash. Microsoft

Microsoft is planning its largest round of layoffs in five years as the software giant looks to integrate Nokia Oyj's handset unit, Bloomberg reported Monday, citing people with knowledge of the company's plans.

The job cuts, expected to be announced as soon as this week, will likely affect positions in the Nokia unit that serve the same function in other parts of Microsoft, as well as in marketing and engineering, Bloomberg reported. Microsoft added roughly 25,000 employees when it completed its $7.2 billion acquisition of Nokia's devices and services division in April.

Sources told the news agency that the round of job cuts could be the largest in Microsoft's history, exceeding the 5,800 positions it eliminated in 2009.

CNET has contacted Microsoft for comment and will update this report when we learn more.

The report appears to buttress a prediction made Friday by Nomura Securities analyst Rick Sherlund, who wrote that he expected Microsoft to announce layoffs that would range between 5 percent and 10 percent of its employee head count when it releases its fiscal fourth-quarter earnings report on July 22. He estimates that Microsoft could eliminate about $1 billion in costs through a 25 percent reduction in the Nokia business.

The acquisition marked the end of a significant chapter in Nokia's history and the start of a new one under Microsoft. The software giant is looking to the devices maker to continue promoting its Windows Phone mobile operating system and to help in its plan to transform itself into a devices and services company.