In the largest-ever job cuts announced by
Microsoft, about half of Nokia’s workforce may have to face the axe. The
company also announced scrapping Nokia X android phones in favor of Nokia’s Windows
Phone, Lumia. The cuts come after Microsoft
integrated its $7 billion
Nokia acquisition, which was completed last year. The cuts represent about
14,000 of Microsoft's overall workforce, around 127,000. About 12,500 of the
reductions are expected to come from Nokia.
Currently the company boasts 127,104 members of staff,
meaning the cuts will equal approximately 14 percent of Microsoft's workforce. The
last time Microsoft cut a significant number of jobs was in 2009, when the
company laid off around 5 percent of employees as the financial crisis was at
its peak.
Microsoft Chief Executive Officer Satya Nadella stated
that Nokia's Devices and Services business, which it acquired for
$5 billion last year, will be most affected.
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| Satya Nadella |
Microsoft devices chief Stephen Elop details
the company's renewed focus on Windows Phone. "In addition to the
portfolio already planned, we plan to deliver additional lower-cost Lumia
devices by shifting select future Nokia X designs and products to Windows
Phone devices," says Elop. "We expect to make this shift
immediately while continuing to sell and support existing Nokia X
products."
The full version of the statement from
Nadella –
From: Satya Nadella
To: All Employees
Date: July 17, 2014
at 5:00 a.m. PT
Subject: Starting to
Evolve Our Organization and Culture
Last week in my email to you I synthesized our strategic direction as a
productivity and platform company. Having a clear focus is the start of the
journey, not the end. The more difficult steps are creating the organization
and culture to bring our ambitions to life. Today I’ll share more on how we’re
moving forward. 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 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. 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 synergies and
strategic alignment.
First, we will simplify the way we work to drive greater accountability,
become more agile and move faster. As part of modernizing our engineering processes the expectations we
have from each of our disciplines will change. 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. In addition, our business processes and support models
will be more lean and efficient with greater trust between teams. The overall
result of these changes will be more productive, impactful teams across
Microsoft. These changes will affect both the Microsoft workforce and our
vendor staff. Each organization is starting at different points and moving at
different paces.
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.
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. Thank you for your support
as we start to take steps forward in evolving our organization and culture.
Satya
