Last week, Microsoft was said to be considering layoffs ranging between 5 percent and 10 percent, its biggest job cuts to date. The idea appears supported by the July 10 memo sent by CEO Satya Nadella to Microsoft’s employees. The memo indicated that Microsoft would take “actions to flatten the organization and develop leaner business processes,” which suggests a headcount reduction. The coming job cuts could exceed 5,800 personnel, larger than the cuts made in 2009. That represented Microsoft’s biggest company-wide layoff to that point. However, Microsoft has not definitively stated that it will be carrying out such a layoff, so it’s still in the rumor stage.

In the past, Microsoft held its place in the global markets largely through its Windows OS monopoly. However, recent investments have gone into its cloud computing platform, Microsoft Azure. Overall, the Windows platform holds only a 14 percent market share globally, when mobile devices are included, trailing the Android and iOS. Microsoft has been building more datacenter infrastructure to offer better support through cloud-based services than its competitors, namely Amazon Web Services and Google.

Nadella characterized Microsoft as a “productivity and platform company” in his July 10 memo, a major change from former Microsoft CEO Ballmer’s “devices and services company” model. This month, Nadella promised further clarification about the “engineering and organization changes we believe are needed.” The new CEO feels that Microsoft is still in transition, moving its customers toward subscribing to cloud-based services vs. the more traditional perpetual licensing model.

Microsoft currently has 127,104 employees, but it acquired about 25,000 additional employees as part of its acquisition of Nokia, which was completed in late April. Cuts could be made where Nokia jobs overlap those at Microsoft. Xbox marketing was also mentioned as a possible target. Microsoft plans to announce its earnings results for its fiscal fourth quarter next week, which likely could be when Nadella will announce the new organizational changes, and possibly the rumored layoffs.