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Microsoft to ax 18,000 jobs this year, laying off more than 14% of total workforce

post #1 of 104
Thread Starter 
Microsoft, as was expected, announced on Thursday that it will be laying off employees this year, but the total number of cuts are much higher than anticipated, representing by far the largest-ever personnel reduction in the Windows maker's history.

ms


A total of 18,000 workers will be laid off over the next year, Microsoft revealed, with the bulk of those -- 12,500 jobs --?coming from professional and factory positions related to the purchase of Nokia. Microsoft's $7.2 billion buyout of Nokia's hardware division added some 30,000 employees to the company's payroll.

With the remaining 5,500 layoffs coming from other departments, the 18,000 sum represents by far the largest round of personnel cuts in Microsoft's corporate history. Its previous record was the axing of 5,800 jobs in 2009.

As of early June, Microsoft had just over 127,000 total employees. That means the 18,000 cuts would represent more than 14 percent of the Redmond, Wash., company's global workforce.

Microsoft said the "restructuring plan" will be "substantially complete" by the end of this year, and fully completed by the end of June 2015. It expects to incur up to $800 million in associated severance and benefit costs, as well as between $350 million and $800 million asset-related charges.

Word first leaked earlier this week that Microsoft was set to announce a major new round of layoffs, though it was unclear at the time whether the total number of cuts would be the company's largest ever. With Thursday's official announcement, it's now known that the 18,000 removed workers will be more than three times larger than its previous biggest layoffs.

lumia


The measures are the latest in a string of changes for the company, which is attempting to reclaim some of its past glories which have been lost to mobile devices. Microsoft was a major player in the smartphone space before the iPhone and device's running Google's Android took over the market, while sales of low-end PCs have been hurt by the success of the iPad.

While 18,000 jobs will be lost in the next year, the biggest firing may have been the ouster of former Chief Executive Steve Ballmer, who is rumored to have been squeezed out of the company due to a lack of support from Microsoft's board of directors. Ballmer faced significant criticism for failing to adapt and compete with Apple's iPhone and iPad, while high-profile misses with the company's Windows Vista and Windows 8 operating system releases were believed to have contributed to slumping PC sales.

Ballmer's replacement, and the man overseeing the massive round of layoffs, is CEO Satya Nadella, who took over the role in February. The cuts being made under his watch are part of a major attempt to turn the company's fortunes around and take back lost market share in mobile and reinvigorate sales growth in PCs.
post #2 of 104
Hopefully some of the people let go were the ones who designed the GUI for Windows 8. There are open source (i.e. designed for free) GUIs that are better than that.
post #3 of 104
Stock is way up pre-market. Stock very well might be up 7-8% this week and that's before earnings announcement on the 22nd.
post #4 of 104
Lay-offs, the laziest business strategy. This just proves Ballmer's incompetency even further.
post #5 of 104
Quote:
Originally Posted by ascii View Post

Hopefully some of the people let go were the ones who designed the GUI for Windows 8. There are open source (i.e. designed for free) GUIs that are better than that.

 

It's mostly people who've come over from Nokia.

post #6 of 104
Quote:
Originally Posted by AjbDtc826 View Post

Lay-offs, the laziest business strategy. This just proves Ballmer's incompetency even further.

Uh, you realise Ballmer has been gone for 6 months?
post #7 of 104

So that helps the bottom line. Any ideas on how to grow the top line?

post #8 of 104
As was expected America went bankrupt.
post #9 of 104
Quote:
Originally Posted by RichL View Post
 

 

It's mostly people who've come over from Nokia.

 

But it's still 5500 that weren't from Nokia, which still rivals their biggest layoff ever.

 

I'd rather see their marketing dept get a big hit than their GUI people. Most of them are following directives, and they don't need to concentrate on marketing their products. They need to make better ones.

post #10 of 104
So, Microsoft should lay off 50% of their workforce and see MSFT shares shoot up over 20%.

Winning.
post #11 of 104
How many of these jobs will be cut in the US? Nokia doesn't have manufacturing facilities in the US. I have the feeling that out of the 18000 layoffs, very few will be in the US.
According to their website they have factories in Brazil, China, Hungary, India, Mexico, South Korea, and Vietnam.
http://www.nokia.com/global/about-us/people-and-planet/operations/production-facilities/production-facilities/
Regarding engineering, marketing, sales, those employees are all over the world, especially the ones related to Nokia.
post #12 of 104
Now Nadella's remarks about Microsoft's direction makes sense.
They were corporate-speak for massive layoffs.
And they indicate that Microsoft still is rudderless.
post #13 of 104
In fairness, Microsoft needs to get rid of almost all Nokia employees. This is actually an absolutely necessary move.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #14 of 104

I do not how Microsoft handled these layoffs, but in general, I hate how a lot of software companies handle layoffs. They tend to separate employees into two or three groups with one of the groups receiving the ax. The anxiety of clearly suspecting exactly why everybody is being separated despite superior feigning ignorance. And then at the meeting learning that everybody not present is packing up their belongings and leaving the office. But hey, lets follow up with a company sponsored lunch or movie for retained employees. Even more fun is when you realize your spouse is not in the retained group (that happened to me a few years back).

post #15 of 104

I haven't heard the new CEO chime in about specifics but one thing they can start doing is making beautiful products. For instance, there's no comparison between Office and iWork. The latter is well designed, easy, pleasing to use, and allows one to create exceptionally beautiful documents. Office? Well....it's a standard. For now.

 

I just keep going back to this Jobs interview on MS and lack of taste:

 

http://www.youtube.com/watch?v=mOgOP_aqqtg

 

MS: Hire some Jonny Ives. Then listen to them.

post #16 of 104
18,000 Sinofskys + 1 Ballmer + 1 Gates ...

Ballsy move!

Nadella just bought 3 envelopes ...
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post #17 of 104
Quote:
Originally Posted by jameskatt2 View Post

Now Nadella's remarks about Microsoft's direction makes sense.
They were corporate-speak for massive layoffs.
And they indicate that Microsoft still is rudderless.
Is there anything MS could do that you wouldn't call rudderless?
post #18 of 104
Such a shame for the employees. I heard the layoffs will continue until morale improves.
post #19 of 104
Quote:
Originally Posted by Rogifan View Post

Is there anything MS could do that you wouldn't call rudderless?

The rudder?

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #20 of 104
Where are these jobs? The mention of Nokia suggest that many of the white-collar jobs will be in Finland, where Nokia is a huge slice of the nation's high-tech industry. And those that are factory jobs in places such as South Korea suggests that Nokia/Microsoft is joining the march to contracting out to huge almost-sweatshop factories built wherever the pay is the lowest.

That's not healthy for a global economy. Kill jobs and over the long run you eliminate the ability of people to buy your products.
post #21 of 104
Meh. They grew too big.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #22 of 104
Quote:
Originally Posted by Elijahg View Post


Uh, you realise Ballmer has been gone for 6 months?

Uh, you realize that it will take much more than 6 months for the effects of any changes made by his successor to be noticeable, right? These layoffs have been coming for a long time, Ballmer simply left before they were implemented.

post #23 of 104
Quote:
Originally Posted by Inkling View Post

That's not healthy for a global economy. Kill jobs and over the long run you eliminate the ability of people to buy your products.

Keeping jobs that you can't afford to keep is worse for the economy. If Microsoft goes under, you will lose 100% of the jobs rather than 14%
post #24 of 104
"The job cuts are part of CEO Satya Nadella’s sweeping changes to the company, as he transitions away from former CEO Steve Ballmer’s vision of a “devices and services” company toward a “mobile-first and cloud-first” productivity firm."

So he is planning to take on Apple and Google (through their evil servants Scamsung) even more directly starting with <1% of the mobile market? That on the heels of the Apple-IBM alliance too. I had read many articles suggesting he might move towards a more IBM / Oracle type company and get out of the consumer end. So, I am left not seeing how he pulls off focusing on mobile and without a customer base for it, the cloud sure won't be in high demand.
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post #25 of 104
Quote:
Originally Posted by Inkling View Post

Where are these jobs? The mention of Nokia suggest that many of the white-collar jobs will be in Finland, where Nokia is a huge slice of the nation's high-tech industry. And those that are factory jobs in places such as South Korea suggests that Nokia/Microsoft is joining the march to contracting out to huge almost-sweatshop factories built wherever the pay is the lowest.

That's not healthy for a global economy. Kill jobs and over the long run you eliminate the ability of people to buy your products.

If it were explainable as easily as saying these are not really 'Microsoft' jobs he'd have done that I would think, that or he sucks at PR.
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post #26 of 104
If MS was going to trim to fat they should have started with their bloated SW.

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post #27 of 104
Quote:
Originally Posted by RegurgitatedCoprolite View Post

So, Microsoft should lay off 50% of their workforce and see MSFT shares shoot up over 20%.

Winning.

How many people do you really need to maintain Windows and Office? Neither will be needed in the near future so he may as well cut back.
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post #28 of 104
Quote:
Originally Posted by bugsnw View Post

So that helps the bottom line. Any ideas on how to grow the top line?

He has been on the hot line to Blackberry for tips on this obviously ... 1biggrin.gif
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post #29 of 104
Quote:
Originally Posted by Suddenly Newton View Post



The rudder?

 

And if the CEO was from the Netherlands...

Not to make light of the layoffs, but it looks even more dramatic on the heels of the Apple/IBM announcement. It looks like, "Apple and IBM teamed up? Okay, we give up! Bring me a tall stack of pink slips." The good talent will get picked up, but it still sucks to have to get canned.
post #30 of 104
Quote:
Originally Posted by SolipsismX View Post

If MS was going to trim to fat they should have started with their bloated SW.

I once read somewhere that those ribbons would be the death of Microsoft ... 1biggrin.gif
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post #31 of 104
Quote:
Originally Posted by digitalclips View Post

I once read somewhere that those ribbons would be the death of Microsoft ... 1biggrin.gif

SW ribbons are digital toe tags.
Edited by SolipsismX - 7/17/14 at 7:49am

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post #32 of 104
Quote:
Originally Posted by Delayed View Post

Uh, you realize that it will take much more than 6 months for the effects of any changes made by his successor to be noticeable, right? These layoffs have been coming for a long time, Ballmer simply left before they were implemented.

Uh, really.
Quote:
Originally Posted by Forbes View Post

The job cuts are part of CEO Satya Nadella’s sweeping changes to the company, as he transitions away from former CEO Steve Ballmer’s vision of a “devices and services” company toward a “mobile-first and cloud-first” productivity firm.
post #33 of 104
Quote:
Originally Posted by Suddenly Newton View Post

Quote:
Originally Posted by Rogifan View Post

Is there anything MS could do that you wouldn't call rudderless?

The rudder?

MS took the easy out -- layoffs ease the pain, but don't cure the disease.

MS needs to decide, strategically, which businesses in can succeed in.

As JLG said it:
Quote:
Tortured statements from CEOs, politicians, coworkers, spouses, or suppliers, in no hierarchical order, mean one thing: I have something to hide, but I want to be able to say I told you the facts.

With all this in mind, let’s see if we can restate Nadella’s message to the troops:

This is the beginning of our new FY 2015 – and of a new era at Microsoft.
I have good news and bad news.
The bad news is the old Devices and Services mantra won’t work.

For example: I’ve determined we’ll never make money in tablets or smartphones.

So, do we continue to pretend we’re “all in” or do we face reality and make the painful decision to pull out so we can use our resources – including our integrity – to fight winnable battles? With the support of the Microsoft Board, I’ve chosen the latter. We’ll do our utmost to minimize the pain that will naturally arise from this change. Specifically, we’ll offer generous transitions arrangements in and out of the company to concerned Microsoftians and former Nokians.

The good news is we have immense resources to be a major player in the new world of Cloud services and Native Apps for mobile devices. We let the first innings of that game go by, but the sting energizes us. An example of such commitment is the rapid spread of Office applications – and related Cloud services – on any and all mobile devices. All Microsoft Enterprise and Consumer products/services will follow, including Xbox properties.

I realize this will disrupt the status quo and apologize for the pain to come. We have a choice: change or be changed.

Stay tuned.

Or words (about 200) to that effect.

http://www.mondaynote.com/2014/07/13/microsofts-new-ceo-needs-an-editor/

Where does the Xbox fit?
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post #34 of 104
Quote:
Originally Posted by Elijahg View Post


Uh, you realise Ballmer has been gone for 6 months?

 

Steve Jobs has been gone for two years and he still gets blamed for stuff. What’s your point?

post #35 of 104
Quote:
Originally Posted by lkrupp View Post

Steve Jobs has been gone for two years and he still gets blamed for stuff. What’s your point?

If you read the post I quoted, you'd see it was a reply to AjbDtc826 claiming Ballmer was to blame for these cuts, when he wasn't the one directly instigating them.
post #36 of 104
Quote:
Originally Posted by Dick Applebaum View Post

MS took the easy out -- layoffs ease the pain, but don't cure the disease.

MS needs to decide, strategically, which businesses in can succeed in.

And therein lies their problem in a nutshell. Without Gates ripping off Steve they have nothing left that can succeed. As others have mentioned they might have been better off staying with their true and tested MO and jumping in and reverse engineering iOS from the get go and facing the courts later like Google. For once in their existence they tried to do something themselves ... the rest will be written by historians.
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post #37 of 104

When founders leave (Gates, Ballmer, Jobs, Dell, etc.) the bean counters usually take over. It then becomes all about maximizing profits, cutting costs, maintaining the status quo, not rocking the boat. Tim Cook has shown signs of that behavior too, just not as much. Time will tell with him.

post #38 of 104
Quote:
Originally Posted by digitalclips View Post

"The job cuts are part of CEO Satya Nadella’s sweeping changes to the company, as he transitions away from former CEO Steve Ballmer’s vision of a “devices and services” company toward a “mobile-first and cloud-first” productivity firm."

So he is planning to take on Apple and Google (through their evil servants Scamsung) even more directly starting with <1% of the mobile market? That on the heels of the Apple-IBM alliance too. I had read many articles suggesting he might move towards a more IBM / Oracle type company and get out of the consumer end. So, I am left not seeing how he pulls off focusing on mobile and without a customer base for it, the cloud sure won't be in high demand.

One way -- MS gets out of the hardware business entirely (never should have entered it). Then provide a software and services model for the major mobile players.

And spin/sell off the Xbox!
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post #39 of 104
Quote:
Originally Posted by SolipsismX View Post

SW ribbons are the digital toe tags.

Being serious for a moment, I have a feeling this guy is too honest about Microsoft's terrible position and at some point he will get yanked out of the big chair by the powers behind the scenes.
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post #40 of 104
Quote:
Originally Posted by iaeen View Post

Keeping jobs that you can't afford to keep is worse for the economy. If Microsoft goes under, you will lose 100% of the jobs rather than 14%

MS can afford to keep them monetarily. It's not good for business to have too many redundant employees. Hence why WS loves layoffs.
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