Early this morning Microsoft announced that it will reduce its headcount in the wake of its acquisition of Nokia‘s hardware assets. The company was, at one point, up more than 3% in per-market trading following the news. The company opened above $45 — a fresh 14 year high — before retreating, and then regaining some ground.
Investors, it seems, are content with the scale of the layoffs in contrast to the number of Nokia employees that Microsoft purchased — around 25,000 — and are not too bothered with an estimated $1.1 to $1.6 billion in pre-tax charges that the company will consume due to the staffing changes.
The layoffs also extend into Microsoft’s large “shadow workforce,” according to GeekWire.
Microsoft also announced today that it is ending Nokia’s nascent Android smartphone efforts, and will be shuttering some factories and design facilities.
The moves were expected. It was a guessing game as to how many people would go, but it was widely, and correctly estimated that the reduction in employment would be the largest single-event of its sort in Microsoft’s history.
The current 2% gain in Microsoft’s share price might appear modest, given the scale of the changes. However for a company worth around $370 billion to beat its sector by more than a net 2.5% on a down day after announcing a broad swath of news is notable. It’s even more so following a strong day that lifted its value nearly 4%.
Microsoft has risen more than 23% in value since its new CEO, Satya Nadella, took over that role at current market prices.
