Microsoft to axe thousands in new job cuts round

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Microsoft to axe thousands in new job cuts round

Nadella targets smartphone business again.

Microsoft will further reduce its headcount this year with an extra 2850 staffers worldwide to get the chop.

The latest round of redundancies comes after 1850 employees were told to pack their bags in May this year, and 7400 positions were eliminated in Microsoft's ailing phone hardware business from June 2015.

According to Microsoft, the job eliminations are part of a management restructuring plan approved in the company's fourth fiscal 2016 quarter.

Once again, it's the smartphone hardware business and global sales unit that will bear the brunt of the redundancies, the company said. Jobs are also being shed in Microsoft's global sales division, but the company did not specify how many.

Microsoft made the staff cuts public in a regulatory filing with the US Securities and Exchange Commission (SEC) and noted that as at June 30 this year, the company employed 114,000 people in total. Of these, 63,000 are in the United States and 51,000 workers are deployed worldwide.

Despite the job cuts, Microsoft said its business "depends on our ability to attract and retain talented employees". The company said recruiting is difficult thanks to a competitve market for skilled workers and restrictive immigration laws in the United States.

Microsoft also outlined several risk factors that it said could hurt the company's bottom line. 

It specified intensifying competition in all areas of its business, and the fact that despite attempting to transition to a cloud-first, mobile business model, the company still makes most of its money through the traditional licensing of software.

This makes Microsoft vulnerable to competitors that offer free applications and services as well as content and earn revenue via advertising, the company said.

Open source software that's free and developed and distributed at marginal cost is another factor putting the squeze on Microsoft's margins.

The $35 billion acquisition of professional networking site LinkedIn similarly involves "significant challenges and risks," Microsoft said.

These include not advancing the company's business strategy or providing an adequate return on investment, along with being unable to integrate LinkedIn employees and technology successfully.

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