Many are speculating what success Microsoft will have under the leadership of its new chief executive officer, Satya Nadella. As part of Nadella's plan, 18,000 total workers from Microsoft in various departments and divisions, including newly acquired Nokia, will be subject to a plan of layoffs.
Nadella hinted at layoffs originally in an email to Microsoft staff. He made that email public on a Microsoft webpage. Some are saying that the coming layoffs over the next year will be good for the software company.
Nadella's plan, or at least the prospects of it, are already paying off for the company as sources report. According to these sources, Microsoft's shares have risen by 19 percent so far this year. The round of layoffs coming at the company will be the largest in its history, once complete.
Nadella's goal, at least with the layoffs, is to create a leaner Microsoft, one that doesn't rely so heavy on the bureaucracy of middle- and micro-management.
Microsoft wants remain a productivity platform company, but focusing on "mobile-first" and "cloud-first" strategies. Part of its consumer hardware and software product strategy involves Nokia. Interestingly, most of the coming layoffs will be employees of that newly acquired branch of Microsoft, some reported 12,500 or so employees. The rest of the layoffs will affect factory, engineering and other professional positions within the company's several departments and divisions.
Nokia stood alone among major device competitors such as Apple and Samsung who outsourced the production of their phones. Microsoft may seek cheaper alternatives itself.
Microsoft may struggle because it has so many irons in the fire, as well as legacy issues and complexities that still distract the company from moving toward its mobile strategy (even though the push for cloud is part of that very strategy).
Analysts say the layoffs will provide relief for investors and for the company's struggles with other issues. Nadella's plan is certainly popular among analysts and investors, but employees and labor groups have criticized the timeline, arguing that the layoffs need to come quicker and swifter to avoid morale issues.
According to a recent report, Microsoft will give severance packages to those whose jobs were cut during the layoffs. Many will also receive assistance with finding a new job. Nadella is reportedly holding an upcoming question and answer session to discuss the changes at Microsoft. The company will certainly have its work cut out for it, even with Nadella and the layoffs.
