Microsoft is cutting 18,000 jobs next year with the acquired Nokia business bearing the brunt of the company’s strategy.
A total of 12,500 professional and factory positions will be eliminated through the alignment of the Nokia business with the main Microsoft operations.
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The company said staff affected will be notified over the next six months, with the cuts completed by the end of June 2015.
Microsoft said the cuts, including severance pay, would cost $1.6bn over the next year. It also faces up to $800m of asset-related charges.
In his latest email he said: "We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organisations and increasing the span of control of people managers. In addition, our business processes and support models will be more lean and efficient with greater trust between teams.”
In April, Microsoft completed the acquisition of Nokia Devices and Services business.
"The mobile capabilities and assets Nokia brings will advance our transformation," said Nadella at the time. "Together with our partners, we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world."