As part of the company’s previously announced plan to save money and stop losses, Microsoft will be letting 2,100 staff go.
It’s been a pretty bleak year for Microsoft. They set off 2014 trying to gain ground in the mobile market with their Surface tablets and Windows Phones struggling to go up against bigger and better iOS and Android powered offerings, the Xbox One’s first year on sale has seen its sales figures trickle somewhat concerningly behind the resplendent PlayStation 4 and to make matters worse, this is all going on after they agreed to take on Nokia’s phone business for the cool number of $7.2 billion along with 25,000 new employees.
Considered to be a poorly judged parting gift from former CEO Steve Ballmer, few people agreed that it was a good decision, instead regarding it as a problem that new Microsoft CEO Satya Nadella would need to fix. So how is he going about solving it? By a staggering amount of job cuts, with this latest round of them firing 2,100.
At the initial announcement, Microsoft revealed that they would be cutting 18,000 jobs (around 14% of their global workforce) and with 13,000 already axed this recent 2,100 was not entirely unexpected. However, it is the regions of the business in which the job cuts have taken place that are perhaps of some concern.
To break them down, 747 positions will be given the chop in Washington, 160 in California and the remainder being divided up by job cuts across the globe. The troubling part of this for investors and consumers alike is that 50 of those Californian job cuts were in Microsoft’s Silicon Valley Research team which has now being closed down altogether, effective immediately. While it’s hardly unheard of for a company to decide to focus on what they’ve got rather than what they could have, it does reflect Microsoft’s new strategy to focus on their Windows Phones (where they have less than 5% of the mobile market) and productivity software that many consumers say they don’t want or need.
So is it a case of Microsoft starting to (troublingly) move all of its eggs into one basket? Depending on whether you’re a glass half-full or half-empty type of person, that answer will somewhat differ. But, with several thousands job cuts still to come before Microsoft hits their 18,000 target, it’s undeniable that even more big changes are still to come.
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