Some 12,500 of the cuts are coming from the Nokia Devices and Services unit — roughly half that unit’s workforce. The company said it expects pre-tax charges over the next four quarters of $1.1 billion to $1.6 billion for severance and other costs. The cuts are just the latest acknowledgement by Microsoft and new CEO Satya Nadella that the company is committed to making tough decisions to improve its position in the technology landscape.
It’s a lot of jobs, but it is not shocking given the Nokia deal.
Nadella also expressed the need to simplify Microsoft’s organisation in his memo:
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.
He needs to shake things up. Hopefully, this reorganisation will help Microsoft to move a little faster.