LINKEDINCOMMENTMORE

REDMOND, Wash. -- A Microsoft spokesperson confirmed that the company would cut 1,351 jobs in the Puget Sound Thursday.

In total, Microsoft says it will eliminate up to 18,000 jobs over the next year as the company works to integrate the Nokia devices business it bought in April.

The news sent Microsoft's stock up 3 percent in morning trading.

Although the job cuts had been expected, the extent of them was a surprise. It's the boldest move by CEO Satya Nadella since he took the reins from Steve Ballmer in February. In a public email to employees Thursday, he said the changes were needed for the company to become more agile and move faster.

In a letter to employees posted on Microsoft's website, CEOSatya Nadella wrote that most of the cuts will be made over the next six months.

READ:CEOSatya Nadella's letter to employees

With the Nokia deal, Microsoft's employee headcount rose from about 99,000 last year to 127,000 as of last month.

Microsoft Corp. said Thursday that of the up to 18,000 jobs, about 12,500 professional and factory jobs will be cut. It anticipates charges of $1.1 billion to $1.6 billion over the next four quarters, which includes $750 million to $800 million for severance and related benefit costs.

FBR Capital Markets analyst Daniel Ives said the cuts were about double what Wall Street was expecting.

But he said they were necessary to streamline operations and clean up a bloated management structure.

Microsoft needs to be a 'leaner and meaner' technology giant over the coming years in order to strike the right balance of growth and profitability around its cloud and mobile endeavors.

The move dwarfs Microsoft's previous biggest job cut, when it cut about 5,800 jobs in 2009. That was the company's first ever widespread layoff.

We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company, Nadella said.

Microsoft has been shifting its focus from traditional PC software to cloud computing and cloud-based products like its Office 365 productivity software.

With its $7.3 billion acquisition of Nokia's cellphone business, Microsoft has been is seeking to meld its software and hardware business into a cohesive package, similar to rival Apple. In a letter to employees, Executive Vice President Stephen Elop said the company will drive sales of its Windows Phone by targeting the lower-price smartphone market with its Lumia devices. It also plans to develop more products for the higher-end smartphone segment.

In a blog post a week ago, Nadella hinted at the move, saying Microsoft had to change and evolve its culture for the mobile-first and cloud-first world.

Nadella said Thursday that he would give more details when Redmond, Wash.-based Microsoft reports fiscal 2014 results on Tuesday.

Shares of Microsoft rose $1.27, or 3 percent to $45.35 in premarket trading. The stock is up nearly 18 percent since the beginning of the year.

LINKEDINCOMMENTMORE
Read or Share this story: http://www.nwcn.com/story/money/business/2014/08/18/14025052/