Microsoft says that they're working to realign their workforce, with the first step being a large scale workforce reduction of up to 18,000 jobs. They say that the vast majority of the jobs that will be eliminated will happen in the next six months.
The bulk of the layoffs will come from the Nokia Devices and Services Division, with 12,500 cut there. Microsoft plans to shift their business in the smartphone space, working to integrate the Nokia teams into the company.
Microsoft's announcement from this morning contains no mention of layoffs in their Xbox division.