Satya Nadella

Satya Nadella, CEO of Microsoft, has warned employees to expect change and said details would be announced in July. (Mark Lennihan/Associated Press)

Microsoft is set to announce the biggest round of layoffs in five years as it integrates the Nokia handset business it bought last September, according to Bloomberg.

It is expected to be the biggest round of layoffs since 2009, when then-CEO Steve Ballmer cut 5,800 jobs or five per cent of the company’s workforce.

Cuts will come in marketing, engineering and in divisions that overlap the handset business, Bloomberg reported.

Satya Nadella, Microsoft's current CEO, warned of changes to come at the company in a memo to employees last week.

“We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes,” he wrote. “Culture change means we will do things differently.”

The core focus of these changes would be to concentrate on a mobile-first and cloud-first world, Nadella said.

Microsoft added 25,000 employees when the deal for Nokia closed in April and now has 127,000 staff worldwide.

At the time of the deal, the software maker told investors it planned to find $600 million in cost savings as a result of the merger.

Microsoft reports fourth-quarter earnings July 22 and further details may emerge before then.