Microsoft is to cut up to 18,000 jobs marking the deepest cuts in the technology firm's 39-year history, according to BBC News.

The bulk of the cuts, around 12,500, will be in its phone unit Nokia, which Microsoft bought in April, the firm said.

Microsoft pledged to cut $600mln per year in costs within 18 months of closing the acquisition.

The cuts are much more severe than the 6,000 initially expected.

Chief executive officer Satya Nadella, who took the helm in February, wants the firm to shift its focus away from software to online services, apps and devices.

"Making these decisions to change are difficult, but necessary," Nadella wrote in the announcement to staff.

The firm said it also planned to have fewer layers of management "to accelerate the flow of information and decision making."

Microsoft said staff affected by the job cuts would be notified over the next six months.

Last week, Nadella rebranded the firm as "the productivity and platform company for the mobile-first and cloud-first world."

The cuts are aimed at helping Microsoft better compete with rivals including Google and Apple. The last significant job cuts at the firm were in early 2009, when previous chief executive Steve Ballmer axed 5,800 staff.