REDMOND, Wash. – Tech giant Microsoft this week announced plans to cut 18,000 jobs- approximately 15% of the company’s workforce- in order to maximize shareholder profit.
“The first step to building the right organization for our ambitions is to realign our workforce. With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year,” wrote Microsoft CEO Satya Nadella in a company-wide memo. “We believe the savings generated from not having to pay those 18,000 people will boost profits tremendously.”
Wall Street’s reaction to Microsoft’s largest layoff in its history was positive, as the company’s stock price rose to the highest it’s been in nearly 14 years once news of the layoffs was made public. “Historically, the markets reward companies the lay people off,” wrote Nadella in the memo, predicting the stock price surge. “I want to personally thank the 18,000 of you who will soon be out work. Because of your sacrifice, many of us at the top of the corporate ladder will make a great deal of money.”
According to Nadella, 12,500 of the cuts will be coming from recently-acquired Nokia- totalling approximately half of the Nokia workforce. However, Nadella maintained his faith in the Nokia purchase. “We will realize the synergies to which we committed when we announced the acquisition last September,” he wrote. “When we bought Nokia, we saw an opportunity to lay off vast numbers of people who at the time meant nothing to us. Today’s announcement brings that strategic decision full circle.”
Moving forward, Nadella said the layoffs placed Microsoft in an enviable position. “Apple, Samsung, they wish they had the innovation and technological expertise to layoff 18,000 people,” he wrote. “And with still over 100,000 employees, we perfectly positioned to jettison another ten or twenty thousand at a moment’s notice.”