updated 10:30 am EDT, Tue July 8, 2014
Layoffs a result of redundant positions generated by Nokia purchase
In the wake of Microsoft's Nokia buy, the giant is facing an abundance of employees. Despite having over 2,000 open positions according to its own hiring page, sources within and close to the company claim that up to 10 percent of the workforce will be purged under former CEO Steve Ballmer's "One Microsoft" 10-year plan for the company.
Originally announced in September last year, the $7.2 billion sale saw Microsoft take control of Nokia's Devices & Services business, including its mobile phone production. A 10-year licensing agreement for Nokia's Lumia and Asha brands is also included, as well as the Android-based Nokia X range, with more than 8,500 design patents and 30,000 utility patents and pending patents becoming part of the purchase.
GigaOM's source within the company claims that "Ballmer buys Nokia and adds 25,000 people and a business that makes no money, so do the math." The purchase of the smartphone manufacturer swelled company ranks to over 127,000 employees, with many redundant functions. Microsoft is expected to take a $1 billion hit to earnings in the first year after acquisition as a result of the purchase.
An internal email circulated after the Nokia deal pointed out some of the reorganization details of the merger. Ballmer noted in the memo that "Finance, Legal, HR, Communications, DX / Evangelism, Customer Care and Business Development will integrate functionally at Microsoft. Sourcing, customer logistics and supply chain will be part of Stephen's Devices organization. ICM / IT will also integrate functionally for traditional IT roles."
Microsoft's calendar quarter ends shortly. The company's annual earnings report is due July 22, during the company's annual sales meeting.