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.

Source: ZDNet

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To save money following their $7 billion Nokia purchase, Microsoft have announced record breaking job cuts of 18,000 across their business.

As consumers, we recognise one thing – company’s are out for money. Sometimes that means we get very good products, other times it means that we get shafted out of good prices and very often it means that the things we want to buy are just out of reach due to impossibly high prices (see: high-end smartphones of today). Ultimately, we have to deal with it because we have no choice but as Microsoft announce record breaking job cuts in order to make money following their expensive (and slightly misinformed purchase) of Nokia’s Devices and Services branch and the agreement they made to save $600 million in costs following the deal, plenty of us may have a case for packing up and taking our business elsewhere.

The jobs will mostly take place across Nokia, with employees across both professional and factory level soon to see themselves out of work. Microsoft is doing this as it begins to focus its effort on the ‘core’ areas of their business, including, as you might have guessed, Windows Phone. Lines such as the Android powered Nokia X budget handsets (that were actually very good given their price) will be consolidated and rolled up into the Lumia brand and they’ll be ditching Android (a Windows Phone competitor) too. That’s a small thing to concede given that the Nokia X was being pushed in developing countries especially, though better budget handsets by other companies (such as Samsung and Google themselves) are being worked on for these territories, complete with Android which is arguably a superior mobile operating system too. It’s where Microsoft plans to trim the fat in other areas that is a major issue.

For one, Microsoft feels that productivity software specifically on PC, is where they can do well. Unfortunately, they fail to realise that PC gamers are a huge part of their core market and PC gaming is also far more lucrative than the console market making it a better business deal to pick up the slack there as gamers have been frustrated at Microsoft for not supporting them (a lack of PC titles and the scrapping of Games for Windows haven’t helped either). Meanwhile, Xbox isn’t even considered a “core” part of Microsoft’s business by new CEO Satya Nadella which is perhaps what led him to shutter the Xbox Originals project which was set to bring a plethora of brand new and exciting TV shows to the platform. In fact, that several other brilliant Xbox ideas (Family Sharing, digital game reselling and letting Xbox One consoles be dev kits) have been canned too has left a trail of sour and bitter footprints about the place so with all of the changes that Microsoft is making to save money (and save their bacon after the poor acquisition deal) they’ll have to be careful that they don’t alienate customers altogether.

Source: Microsoft (1), (2)

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