REDMOND, WA—Tech giant Microsoft Corp. beganlaying off 13,000 workers worldwide Thursday, the first round of aplanned 18,000 job cuts over the next 12 months.The 14% reduction will be the largest in the company's history. Acompany spokesman tells GlobeSt.com that about 1,350 of the layoffswill occur in the Puget Sound region, or about 3%of the 43,000 employees based at or near Microsoft's Redmond, WAheadquarters.

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In a company-wide email Thursday to employees, Microsoft CEOSatya Nandella wrote, “The first step to buildingthe right organization for our ambitions is to realign ourworkforce.” Of the worldwide total, the recently acquiredNokia Devices and Services arm is expected toaccount for about 12,500 jobs, “comprising both professional andfactory workers.”

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With that as the backdrop, Stephen Elop,formerly Nokia's CEO and now EVP of Microsoft Device Group, said inan email to group employees that the company would concentratefuture development of high-end Lumia devices in Salo, Finland,while the budget priced phones will be developed in Tampere,Finland. Meanwhile, the company will “ramp down engineering work”in Oulu Finland, where some of the software for Nokia's Asha phoneline was developed.

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“While we plan to reduce the engineering in Beijing and SanDiego, both sites will continue to have supporting roles, includingaffordable devices in Beijing and supporting specific USrequirements in San Diego,” Elop wrote. While the Espoo and Lundfacilities in Finland will continue to focus on applicationsoftware development, “we plan to right-size our manufacturingoperations to align to the new strategy and take advantage ofintegration opportunities.”

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The group expects to focus phone production mainly in Hanoi,wrote Elop, “with some production to continue in Beijing andDongguan, China. Other Microsoft manufacturing and repairoperations will be shifted to Manaus, Brazil and Reynosa, Mexico,respectively, while the company will begin “a phased exit” fromKomaron, Hungary.

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Although tech on the whole is among the strongest growth areasfor office-using employment, Microsoft is not an isolated caseamong more mature companies in the sector.Hewlett-Packard may reduce its 250,000-strongworkforce by as much as 20% over the next few years. Some 13,000IBM employees could face pink slips or transfers,and Reuters reported that both Intel Corp. andCisco Systems have announced staff reductions of about 5% withinthe past year.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.