Microsoft is trimming the fat with 18,000 layoffs

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Date: Monday, July 21st, 2014, 08:47
Category: Announcement, Business, Microsoft, News, Windows


It’s not an easy thing being a Microsoft employee right now, as the software giant is doing quite a bit of refocusing which means some of those workers will inevitably be left in the dust. Just ask the 13,000 employees who were let go last Thursday after CEO Satya Nadella outlined the coming changes in an email to employees sent the morning that the axe fell. About 12,500 of those layoffs were actually Nokia employees who only recently became Microsoft employees as the result of a $7.2 billion acquisition of the company in April. However, the layoff spree isn’t finished as there are still 5500 more layoffs to come in the next six months according to a report at Business Insider.

According to Todd Bishop at GeekWire, about 1,351 positions will be cut in the Seattle region as part of the first to go, representing about 3 percent of the company’s workforce in the region. Bishop also reports that the changes by the CEO are intended to streamline the way Microsoft develops products and runs its engineering teams. Part of the streamlining Nadella maps out seems to involve a reduction of middle management, or “flattening” as he puts it;

Satya-Nadella“In addition, 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”

Other than Nokia, areas that seem to be hit hard by the changes is the Microsoft’s Operating Systems division, including Windows, and Xbox Entertainment Studios which has been confirmed to be closing down in the coming months. The latter was created with the intent of producing entertainment content that could only be found on the Xbox Live online platform, similar in principle to the independent programming that Amazon and Netflix have been delving into. The head of Microsoft Studios, Phil Spencer, made a statement reassuring that in spite of the closing, original programs already in production, such as the soon to be released documentary series “Signal to Noise” whose first installment takes on the rise and fall of Atari, and “Halo: Nightfall” the “Halo” television series, will continue as planned.

“Xbox will continue to support and deliver interactive sports content like ‘NFL on Xbox,’ and we will continue to enhance our entertainment offering on console by innovating the TV experience through the monthly console updates.”

People inside Microsoft expect a “drain on morale” as remaining employees scramble to consider new places to work, apply for the existing internal job openings, or wait out the remainder of the layoffs and changes to see what happens.




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