News

Microsoft May Be Prepping for Biggest Layoff Yet

Microsoft may be preparing to execute its biggest job cuts to date, according to press accounts.

The cuts could be announced sometime this month, according to those accounts. However, Microsoft has not definitively stated that it will be carrying out such a layoff, so it's still at the rumor stage.

Last week, Microsoft was said to be considering cuts ranging between 5 percent and 10 percent, according to a CNET story. That story cited Nomura Securities analyst Rick Sherlund as the source for the job cuts estimate.

The imminent layoff 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.

This week, unnamed sources told Bloomberg that the coming job cuts could exceed 5,800 personnel. If so, the layoff could be larger than the cuts made in 2009, which, at that time, represented Microsoft's biggest company-wide layoff.

Microsoft currently has 127,104 employees, but it acquired about 25,000 Nokia employees as part of its acquisition of Nokia, which was completed in late April. According to the Bloomberg's sources, cuts could be made where Nokia jobs overlap those at Microsoft. Xbox marketing was also mentioned as a possible target.

Nadella characterized Microsoft as a "productivity and platform company" in his July 10 memo, varying from former CEO Ballmer's "devices and services company" formulation, which was part of a company restructuring effort kicked off in mid-July 2013. This month, Nadella promised further clarification about the "engineering and organization changes we believe are needed."

In the past, Microsoft prevailed in its markets largely through its Windows platform monopoly, but most of its investments of late have gone into its cloud computing platform with Microsoft Azure. At Microsoft's Worldwide Partner Conference this week, Kevin Turner, Microsoft's chief operating officer, noted that Windows has just a 14 percent market share globally when considered in the context of mobile devices. The Windows Phone OS still trails Android and iOS, according to analyses from IDC and Gartner Inc. However, Scott Guthrie, Microsoft's executive vice president of the Microsoft Cloud and Enterprise group, claimed during the WPC keynote talk that Microsoft has built out more datacenter infrastructure to support its cloud-based services than its competitors, namely Amazon Web Services and Google.

Nadella, in an early statement upon becoming Microsoft's new CEO, stressed that Microsoft is still in a transition phase in moving its customers toward subscribing to cloud-based services vs. the more traditional perpetual licensing model.

Microsoft plans to announce its earnings results from its fiscal fourth quarter next week, which likely could be when Nadella will announce the new organizational changes, and possibly the rumored layoffs. Despite those rumors, Microsoft performed well in its fiscal third quarter, largely meeting financial analyst expectations.

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.

Featured

  • Spaceflight Training in the Middle of a Pandemic

    Surprisingly, the worldwide COVID-19 lockdown has hardly slowed down the space training process for Brien. In fact, it has accelerated it.

  • Surface and ARM: Why Microsoft Shouldn't Follow Apple's Lead and Dump Intel

    Microsoft's current Surface flagship, the Surface Pro X, already runs on ARM. But as the ill-fated Surface RT showed, going all-in on ARM never did Microsoft many favors.

  • IT Security Isn't Supposed To Be Easy

    Joey explains why it's worth it to endure a little inconvenience for the long-term benefits of a password manager and multifactor authentication.

  • Microsoft Makes It Easier To Self-Provision PCs via Windows Autopilot When VPNs Are Used

    Microsoft announced this week that the Windows Autopilot service used with Microsoft Intune now supports enrolling devices, even in cases where virtual private networks (VPNs) might get in the way.

comments powered by Disqus

Office 365 Watch

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.