Microsoft is expected to announce a new round of job cuts as early as Wednesday to further slash costs, the New York Times reported, citing people familiar with the matter. The latest layoffs are in addition to the 18,000 job cuts the company announced a year ago.

The move is expected to mainly affect employees in Microsoft’s hardware group, including its struggling smartphone business, which it acquired from Nokia last year, the Times reported. Wednesday’s report follows CEO Satya Nadella’s recent message to employees in which he acknowledged that the company would face difficult decisions in coming months.

“We will need to innovate in new areas, execute against our plans, make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value,” Nadella said, in a companywide email in late June.

In June, Microsoft also announced that four senior executives would leave the company as part of a major management overhaul across its Windows and Devices groups. The Redmond, Washington-based company currently employs over 118,000 people worldwide.

Microsoft, which recently announced that it was selling its online display advertising business to AOL, is struggling with smartphones, and continues to lose market share since acquiring Nokia’s handset business. The company has also failed to boost the user base of the Windows Phone operating system, which trails market leaders such as Apple’s iOS and Google’s Android.