After cutting its workforce by around 18,000 over the past year, Microsoft is readying another round of heavy layoffs. The company will cut 7,800 jobs over “the next several months.” Many of the dismissals will come from Microsoft’s phone business, which joined the company’s newly formed “Windows and Devices Group” in June. As part of the merger announcement, Microsoft also revealed it would say goodbye to the last two major Nokia executives still at the company, Stephen Elop and Jo Harlow, in the near future.
It’s clear that CEO Satya Nadella wants Microsoft to be more focused than it has been in recent years. Nadella inherited a company in transition; its nascent Surface business had only just begun to find its feet, and the Nokia deal (arranged by the previous leadership team) had yet to complete. About that acquisition: Microsoft is writing-down a large portion of its value in the coming months — $7.6 billion — which is essentially a tacit admission that paying so much money for the flailing company was not the most financially sound decision.
At the end of March, Microsoft had 118,584 employees (down from 127,000 in July 2014). Losing another 7,800 represents yet another dramatic change within the company. In the past month, Microsoft has sold some of its Bing maps tech (and employees) to Uber, and also struck a partnership with (Engadget’s parent company) AOL to essentially hand off its display ad business.
In an email to Microsoft employees, Nadella says the company remains “committed to our first-party devices including phones,” but wants to “focus our phone efforts in the near term while driving innovation.” What does that mean? Apparently, it means running “a more effective phone portfolio,” with a narrowed focus of “three customer segments.” It says business customers will get “the best management, security and productivity experiences,” value phone buyers “the communications services they want, and Windows fans “the flagship devices they’ll love.” That suggests we’ll see more low-end Lumias, business-focused services and high-end Surface Pro-style devices in the future.