Published on the 18/07/2014 | Written by Newsdesk
Microsoft has today announced a restructuring plan that will eliminate up to 18,000 jobs over the next year as it aligns the recently-acquired Nokia and repositions the business to be a productivity and platform company…
Microsoft employees learnt of the changes in an email from CEO Satya Nadella entitled ‘Starting to Evolve Our Organisation and Culture’.
To quote the email, “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.”
Nadella said the first step to building the right organisation to deliver Microsoft’s ambitions is to realign its workforce, which translated to reducing the size of its overall workforce by up to 18,000 jobs in the next year. He said the vast majority of the outgoing roles (about 12,500) are based in Nokia Devices and Services and form part of the strategic alignment and integration of Nokia into the greater Microsoft company. He added that while Microsoft is eliminating roles in some areas, it is adding roles in certain other strategic areas.
The company will also be simplifying the way it works to “drive greater accountability, become more agile and move faster”.
This includes modernising its engineering processes, having fewer layers of management and “flattening” organisations as well as creating more lean and efficient processes and support models. Nadella also highlighted his desire to create 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.”
“My promise to you is that we will go through this process in the most thoughtful and transparent way possible,” he said and has invited all employees to his monthly Q&A event this Friday.
Nadella also outlined plans for launching Nokia’s “first-party phone portfolio” that will align to Microsoft’s strategic direction.
In a less succinct email sent to Microsoft Devices Group employees, executive vice president Stephen Elop elaborated on the plans for Nokia, including a focus on the market for Windows Phone via the successful Lumia range of phones; delivering additional lower-cost Lumia devices; and delivering breakthrough offerings at the top end of the market.
“The roots of this company and our future are in productivity and helping people get things done. Our fundamental focus – for phones, Surface, for meetings with devices like PPI, Xbox hardware and new areas of innovation – is to build on that strength. While our direction in the majority of our teams is largely unchanging, we have had an opportunity to plan carefully about the alignment of phones within Microsoft as the transferring Nokia team continues with its integration process,” he said.
“It is particularly important to recognize that the role of phones within Microsoft is different than it was within Nokia. Whereas the hardware business of phones within Nokia was an end unto itself, within Microsoft all our devices are intended to embody the finest of Microsoft’s digital work and digital life experiences, while accruing value to Microsoft’s overall strategy. Our device strategy must reflect Microsoft’s strategy and must be accomplished within an appropriate financial envelope. Therefore, we plan to make some changes.”
The actions associated with the plan are expected to be substantially complete by Dec. 31, 2014, and fully completed by June 30, 2015.
There is no indication at this stage of how the announcement affects positions in this region. Microsoft’s global workforce is around 130,000.
To read Nadella’s full email, click here
To read Elop’s email, click here
