Microsoft now leads in tech layoffs

Tech industry layoffs this year total about 50,000

Microsoft's planned 18,000 job cuts, or 14% of its workforce, is the biggest tech layoff announced this year, surpassing Hewlett-Packard's announcement in May that it was cutting 16,000 jobs.

Similar to HP, IBM and other multinational technology companies, Microsoft is not saying how many of these cuts will be in the U.S. But the area with the most Microsoft employees, the Seattle metropolitan area, will see a reduction of 1,351 employees, or about 3% of the 43,000 Microsoft employees in this region, reports the Seattle Times.

Industrywide, there have been nearly 50,000 tech industry layoffs, including Microsoft's, announced so far this year, according to outplacement firm Challenger and Gray. Companies reporting fewer than 1,000 layoffs were not included on this list.

After Microsoft and HP, in third place for announced layoffs this year is Intel, with 5,350.

Microsoft said about 12,500 of its job cuts are related to its recent Nokia acquisition. The mobile phone maker had 32,000 employees last fall, when the acquisition was announced, including 4,700 employees in Finland.

The Finland Times reported that 1,100 jobs will be cut locally.

Janco Associates, which does labor market analysis, said that about 21,900 tech jobs were added over the past three months in the U.S. But the economy isn't adding enough IT jobs to meet the needs of recent graduates, and will need to gain 30,000 to 35,000 jobs a month to keep pace, said Victor Janulaitis, the CEO of Janco.

Janulaitis said IT employment is still below the peak it reach in 2000, when it hit 3.3 million. It is nearly 3.1 million today.

David Foote, the CEO of Foote Associates, which analyzes labor market trends, said that "Microsoft desperately needs an overhaul in just about every way."

If Microsoft CEO Satya Nadella "doesn't bring in the talent needed and motivate his workforce to execute on his vision, nothing will change. You don't do that by reducing your workforce, you do that by building a better one."

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is pthibodeau@computerworld.com.

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