Nadella: Staff cull key to fulfilling Microsoft's ambitions

12,500 jobs to go from Nokia Devices and Services business alone in biggest round of job cuts in vendor's history

Microsoft has confirmed it will axe 18,000 jobs over the next year – the biggest cull in its history – with the majority of the cuts coming in its newly acquired Nokia Devices and Services business.

In a letter to Microsoft employees, chief executive Satya Nadella painted the layoffs as the "first step to building the right organisations for our ambitions".

The Redmond-based vendor said the restructuring plan would result in it absorbing $750m (£439m) to $800m in severance and related benefit costs over the next four quarters.

Of the total cuts, most of which will happen over the next six months, 12,500 jobs will go from the Nokia Devices and Services business it acquired on 25 April. These will comprise both professional and factory workers.

"It's important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas," said Nadella, who gave his first direct address to partners yesterday at Microsoft's Worldwide Partner Conference.

"My promise to you is that we will go through this process in the most thoughtful and transparent way possible.

The announcement comes on the heels of a florid 3,000-word missive Nadella published last week, setting out his vision for the firm he was handed control of in February. The 22-year Microsoft veteran appears to be distancing himself from predecessor Steve Ballmer's attempt to restyle Microsoft as a "devices and services" outfit, instead preferring to brand it as a "productivity and platform" company.

"The first step to building the right organisation for our ambitions is to realign our workforce," Nadella said.

"We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months."