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As Microsoft’s Satya Nadella takes the reigns of the company, it appears as though he’s pushing for some serious blood letting from within the company that currently employs 125,000 people. This enormous 18,000 person layoff figure is mostly thanks to their acquisition of Nokia’s handset and mobile division, which brought on 25,000 people. Out of the 18,000 figure, nearly 12,500 will come from the former Nokia division that they had acquired, which is somewhat to be expected but also incredibly infuriating. Sure, there are going to be a decent amount of redundancies between Nokia and Microsoft, but this amounts to a 50% cut of all Nokia’s workforce. Now, anyone that had left during the Nokia to Microsoft transition looks very smart right about now. And it doesn’t just have to do with the fact that they just dodged the Microsoft bullet.
Microsoft stated that they will do the first round of layoffs with 13,000 people at which point they will then lay off the next 5,000 afterwards, making people constantly fearful of being laid off and working longer hours and doing more work just to keep their jobs. This is the kind of layoff that makes companies look bad and overall will leave quite a distaste for the company with current and former employees. The sad truth is that what Microsoft is doing is really hard to watch when you think about it. Even if Nokia was struggling, they could have easily released Android phones and not ended up having to lay off 50% of their workforce like Microsoft is effectively doing to them now. If you think about it, Stephen Elop just cost half of Nokia their jobs because he decided to run Nokia into the ground. There will always be differing opinions on what Stephen Elop did, but the ultimate result is that Microsoft got a quality smartphone manufacturer for cheap and ruined their business in the process of doing so.
It doesn’t stop there, In addition to the 18,000 layoffs, Satya Nadella also said that Microsoft will cease to produce Nokia Android phones, which means that all future Nokia phones will have to be Windows Phone. Nokia did some experimental stuff with the Nokia X lines of phones prior to the Microsoft acquisition, but since then it appears quite clear that this does not fly with Microsoft. And truthfully, If Nokia had launched a Lumia 1020 with Android (whatever the latest was at the time) it probably would have been one of the best selling phones in the world, ever. Much like Nokia’s N9X line of phones, it brought a world class camera with a world class OS, which Windows Phone simply could not deliver at the time. Sure, Windows Phone is much better than it was, say a year or two ago, but it doesn’t change the fact that Windows Phone’s majority of sales are still in the mid to low end, and not in the high end at all.
There’s no denying that Microsoft needs to refocus their efforts in certain parts of the company and reduce their headcount, but in the end, this all just looks very bad for the company. They’ve already got a lot of things right with their strategy on Office and Windows Phone and they’re clearly improving in a lot of places, even if they did screw up the Xbox golden goose. Ultimately, Microsoft needs a restructuring to figure out exactly where they want to focus and how, but the timing is just very unfortunate and will leave a lot of people very bitter about the Microsoft/Nokia acquisition.
