Microsoft's Job Cuts Comments (Wired & AAWP) ...
>> Why Cutting 18,000 Jobs Was Likely Microsoft’s Plan All Along
Issie Lapowsky
Wired
07.17.14
wired.com
Microsoft will slash up to 18,000 jobs by the end of the year. That’s 14 percent of the company’s workforce, and it amounts to the largest round of layoffs in the nearly 40 year history of the software kingpin.
On Thursday morning, with an email euphemistically titled “Starting to Evolve Our Organization and Culture,” CEO Satya Nadella announced that the bulk of the cuts would affect employees working for Nokia, the mobile phone company Microsoft acquired last September. According to Nadella, these cuts would encourage “work simplification,” “integration synergies,” and “strategic alignment.” But even the heavy-handed business jargon couldn’t mask the simple fact that 18,000 jobs is a hell of a lot of jobs to lose.
And yet, tragic as these deep cuts will be for Microsoft employees and their families, it may be premature to assume this massive round of layoffs means Microsoft is in dire trouble. In fact, tough as the decision may have been, it might be the best thing for the company in the long term. “I find myself saddened and disturbed at the news, but there are definitely legitimate business cases to do it,” says J.P. Gownder, a vice president and principal analyst at Forrester Research.
Tough as the decision may have been, it might truly be the best thing for the company in the long term.
The fact is: when Microsoft acquired Nokia and its 25,000 employees, Nokia had already fallen far behind in the smartphone market, beat out by frontrunners like Apple and Samsung. What Microsoft needed was not the Nokia brand, but greater control over phones running its Windows Phone operating system, so it could work to further expand its place in the market.
Some, but not all of Nokia’s employees, would be critical to that goal, and according to Gownder, this restructuring was likely part of Nadella’s plans all along. “A lot of what’s going on is eliminating what are, on paper, redundancies,” he says. “It’s not a willy nilly thing. I’m sure when they bought Nokia, this was the plan.”
With a slightly leaner organization, Nadella now feels Microsoft will be better suited to compete with the likes of Apple and Google in the smartphone space. Still, even with reduced overhead, Microsoft has a huge task ahead of it to truly compete with other smartphone-makers, and it’s unclear whether Nadella is willing to take enough risks to make that happen. For instance, plans to develop a Nokia phone that runs on Android, a move that might have attracted more consumers to Nokia’s devices, have been shelved. Instead, Nadella is committed to taking the Windows Phone operating system mainstream, which Gownder says is a major challenge, considering it doesn’t have much of an app ecosystem. “All these new apps come out for iPhone and Android, and they don’t come to Windows Phone, in some cases, ever,” he says. “That’s a huge demerit in the efficacy of the platform.”
Gownder also warns that Nadella shouldn’t underestimate the business cost of cutting so many employees. “I do tend to think this will have costs in terms of losing people who have embedded knowledge you don’t realize you’re getting rid of,” he says, adding that the layoffs will have “tangible affects on morale.” To avoid a disastrous fallout, Gownder says, Nadella ought to make it clear that though this is an unprecedented change, it is not just the first of many to come. “My hope is that this is a carefully thought out restructuring, and this will be a one-time change, so they can go and execute,” he says. “There’s always a cost associated with these kinds of moves, but companies can survive and move on.” ###
>> Microsoft/Nokia job cuts, Nokia X line to transition to Windows Phone
Steve Litchfield
AAWP
July 17th 2014
allaboutwindowsphone.com
Filed under 'link of interest', certainly, but big news for many ex-Nokians today, as Microsoft CEO Satya Nadella announced heavy job cuts, quoted below, plus threw out what seems the death knell for Nokia's still-born 'X' line of Android smartphones.
microsoft.com
From the Microsoft missive from Satya:
The first step to building the right organization for our ambitions is to realign 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, our work toward synergies and strategic alignment on 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.
12,500 out of between 25,000 and 30,000 employees acquired with Nokia means that almost half the workforce acquired are being made redundant over the next 12 months, which must be a big blow to many ex-Nokians. Such massive job cuts aren't unexpected, given the merging of two very large companies, with large areas of duplication, but it will still hurt those involved. Engineers and designers, those close to the technology, are likely to be safe. Satya goes on in much the same vein:
Second, we are working to integrate the Nokia Devices and Services teams into Microsoft. We will realize the synergies to which we committed when we announced the acquisition last September. The first-party phone portfolio will align to Microsoft’s strategic direction. To win in the higher price tiers, we will focus on breakthrough innovation that expresses and enlivens Microsoft’s digital work and digital life experiences. 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.
Several interesting turns of phrase in here:
'breakthrough innovation' (in the higher price tiers) presumably refers to imaging and also to new UI concepts based on 3D interaction over the phone screen.
'Nokia X product designs to become Lumia products running Windows' - many people had speculated (wildly) that Microsoft allowed the Nokia 'X' line of handsets to be launched because they (and Android) were the future and that Windows Phone would ultimately be canned. Instead, sensibly, the X line is being changed in upcoming devices to run Windows Phone, keeping Microsoft focussed on just one mobile/portable OS.
The second bullet point above doesn't preclude that Android compatibility plays some part in Microsoft's and Windows Phone's future, of course. Informed observers have speculated that the next version of the OS (8.1 Update 1) may have an Android virtual machine built-in, in the style of Blackberry/Jolla, wherein selected Android applications can be added by a user. ###
- Eric L. - |
