Microsoft today announced axing of up to 18,000 jobs over the next year, the biggest round of jobs cuts in the software pioneer's 39-year history, as it integrates the recently acquired Nokia business and cuts costs.
About 12,500 of these layoffs will come from eliminating overlaps with the Nokia unit, which Microsoft acquired earlier this year in an over USD 7.2 billion deal.
The acquisition of Nokia's handset business in April had resulted in an addition of about 25,000 people to Microsoft.
In a letter to employees, Microsoft Devices Group EVP Stephen Elop said the firm will particularly focus on making the market for Windows Phone.
"In addition to the portfolio already planned, we plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices.
We expect to make this shift immediately while continuing to sell and support existing Nokia X products," Elop said.
He added that in the near term, the company plans to drive volume of Windows Phones by targeting the "more affordable smartphone" segment with Lumia.
In February this year, Nokia had announced the 'Nokia X' family of affordable smartphones, running Google's Android apps, at the Mobile World Congress in Barcelona.
It has four devices – Nokia X, Nokia X+, Nokia XL and Nokia X2 – under the Nokia X range.
For the higher price segments, Microsoft will focus on "breakthrough products" from both the Windows team and the Applications and Services Group.
Also, the company will continue its efforts to bring tablets to market in ways to complement its OEM partners, it said.
"With our focus, we plan to consolidate the former Smart Devices and Mobile Phones business units into one phone business unit that is responsible for all of our phone efforts. Under the plan, the phone business unit will be led by Jo Harlow with key members from both the Smart Devices and Mobile Phones teams in the management team," Elop said.
He added that the team will be responsible for the success of Lumia products, the transition of select future Nokia X products to Lumia and for the ongoing operation of the first phone business.
Elop said the firm's phone engineering efforts are expected to be concentrated in Salo, Finland (for future, high-end Lumia products) and Tampere, Finland (for more affordable devices).
"We plan to ramp down engineering work in Oulu. While we plan to reduce the engineering in Beijing and San Diego, both sites will continue to have supporting roles, including affordable devices in Beijing and supporting specific US requirements in San Diego," he said.