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Report on business: Microsoft 'thoughtfully' fires 18,000

By: 
John Bell

July 21, 2014

In a July 17 memo address to all Microsoft employees, CEO Satya Nadella said the laying off of 18,000 employees would be done in “the most thoughtful and transparent way possible.”
 
“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.”
 
And nothing builds trust within a corporation like a mass firing. This follows a new partnership with Nokia, aimed at making Microsoft a bigger player in the smart phone sweepstakes. “The (Nokia) 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.”
 
Sadly, 18,000 former employees may not be able to afford those higher price tiers. Their life experiences, digital and otherwise, are about to be redefined.
 
Investors were enthusiastic about the mass layoff. According to the Financial Times, "Satya Nadella's announcement that half the 25,000 jobs at Nokia were to go lifted Microsoft's shares more than 6 per cent during the week to their highest point in 14 years." But other economists say Nadella hasn't gone far enough. According to MIchael Cusumano, professor at MIT's Sloan School of Management, "Microsoft has been bloated to 20 years, they have way more people in their product groups than they need. There's still a long way to go even after these cuts." Apparently Cusumano doesn' think Nadella's $18 million salary is bloated and in need of cuts.
 
Nadella’s memo is a masterpiece of corporate sensitivity. Former employees will take solace in the fact that the destruction of their livelihoods is all in a good cause: “steps forward in evolving our organization and culture” to become “a productivity and platform company.” What could be more important than that?

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