Microsoft will eliminate up to 18,000 positions throughout the next year, the technology giant announced Thursday.
About 12,500 of those positions will be culled from its Nokia Devices and Services Business, which Microsoft acquired in April, and "the vast majority" of employees to be laid off will be notified over the next six months.
Microsoft plans to pay out up to $800 million in severance and related benefits as a result of the layoffs. CEO Satya Nadella explained the driving force behind the layoffs, which are the greatest in the company's 39-year history and will affect roughly seven per cent of its total staff.
"The first step to building the right organization for our ambitions is to realign our workforce," he said.
"First, we will simplify the way we work to drive greater accountability, become more agile and move faster. As part of modernizing our engineering processes the expectations we have from each of our disciplines will change. In addition, we plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making."
Nadella added that Microsoft will shift "select Nokia X product designs to become Lumia products running Window", further pushing the company's renewed mobile focus.
Microsoft executive vice president Stephen Elop said that "with a set of changes already implemented earlier this year in these teams, this means there will be limited change for the Surface, Xbox hardware, PPI/meetings or next generation teams."
A Bloomberg report from earlier this week claimed the Xbox division would not emerge unscathed from the anticipated layoffs, and we've reached out to Microsoft for more detail on how its gaming group will be affected by the restructuring.
Nadella issued his first company mission statement last Thursday, outlining his vision for the firm in a lengthy memo distributed to employees.
The 3,000-word letter included a section in which he reiterated his commitment to Xbox, which he said "will continue to vigorously innovate and delight gamers".
Microsoft most recently confirmed a round of layoffs in the Xbox division in April, when an unspecified number of developers were let go following Phil Spencer's promotion to head of the company's games arm.