Microsoft Looks to Cut Up to 18,000 Jobs

My only gripe is that the layoffs are not larger - we need about 20% of the marketing folks and 20% of the program managers that we currently have. I would cut deeply in those disciplines as well and then Page-style cut all of the deadwood non-strategic low-revenue projects (and there are a lot of them).

Laying off Terry Myerson (Windows) and Kevin Turner (chief hacker culture killer) would be a great improvement as well - they are both cancers.

Its a way of softening the blow for the people being laid off. I mean, sure, you are losing your job, on the other hand, do you really want to work for someone whose brain works in a way that would let them write "Last week in my email to you I synthesized our strategic direction"?

My understanding, primarily from friends at Cisco which has its own history of acquisitions and layoffs is that this is roughly standard procedure, catastrophe or not.

Basically, there's always going to be a lot of overlap when acquiring another large company. Loads of people are made completely redundant and things that didn't come out via diligence are discovered.

There's a wait and see period where some people leave, followed by jockeying for position and finally layoffs of people who remain redundant and/or lacked the awareness to pursue either of the former two options.

Obviously, a merger which doesn't pan out would amplify the effect.

What I wonder is how much such a process actually affects the success of these mergers? Do the consultants and banks who assist in these sort of things have a variable to account the back-biting scramble that will take place in each first year?

Last week in my email to you I outlined our direction as a productivity and platform company. On July 22, during our public earnings call, I’ll share further specifics on where we are focusing our innovation investments. The first step to building the right organization is to make changes to our workforce. With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year. Of that total, Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers. We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months.

It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas. My promise to you is that we will go through this process in the most thoughtful and transparent way possible. We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company.

Later today your Senior Leadership Team member will share more on what to expect in your organization. Our workforce reductions are mainly driven by two outcomes: work simplification as well as Nokia Devices and Services integration.

First, we will simplify the way we work to drive greater accountability and move faster. We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers. Our business processes and support models will be more lean and efficient with greater trust between teams. These changes will affect both the Microsoft workforce and our vendor staff.

Second, we are working to integrate the Nokia Devices and Services teams into Microsoft, completing the acquisition announced last September. To win in the higher price tiers with our first-party phone portfolio, we will focus on design and technical innovation. In addition, we plan to shift select Nokia X product designs to become Lumia products running Windows. This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps.

Making these decisions to change are difficult, but necessary. I want to invite you to my monthly Q&A event tomorrow. I hope you can join, and I hope you will ask any question that’s on your mind.