As had been rumored earlier this week, Microsoft lopped off a second set of jobs Thursday, cutting 2,100 positions, as part of a restructuring plan announced two months ago to eliminate 18,000 positions, or about 14 percent of the company’s workforce.
“The reductions happening today are spread across many different business units, and many different countries. We will continue to go through this process in the most thoughtful manner possible, with the deepest respect for affected individuals and recognition of their service to the company,” a spokeswoman for Microsoft said via email.
All affected employees will receive severance packages.
Microsoft dismissed about 13,000 employees in the first wave of layoffs in July, according to the spokeswoman. It’s not clear when the remaining 2,900 jobs will be cut and whether those layoffs will happen in one or more waves. When completed, the staff reduction will be the largest in Microsoft’s history.
It has been assumed that most of the employees who were let go in July worked at the Nokia’s devices and services business, which Microsoft acquired for US$7.2 billion in April, less than two months after Satya Nadella’s appointment as CEO. The deal had been struck in 2013, when Steve Ballmer was still CEO.
In his July public memo to employees about the job cuts, Nadella wrote that “our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers.” That’s about half of the Nokia employees that came over with the acquisition.
Some industry analysts interpreted the Nokia job cuts as a sign that Nadella was having a hard time digesting the acquisition his predecessor had cooked for him, with some going as far as suggesting that Nadella may end up eventually divesting Microsoft of the Nokia business altogether.
Others have second-guessed Microsoft’s decision to stretch out the layoffs process over an extended period of time. The company said in July it expected to have most positions eliminated by the end of 2014, and all of them by the end of its fiscal year in June of 2015. Uncertainty over who will be let go next isn’t good for employee morale and retention. Plus, with each new wave of layoffs, the public is reminded again about the job cuts plan, possibly rekindling concern among large enterprise customers that are heavily invested in Microsoft technology.
Microsoft is undergoing a massive transformation, as it shifts from being mostly a provider of on premises software to instead selling cloud-hosted services billed via annual subscriptions. It can’t afford to unnecessarily replay announcements that reflect possible financial vulnerability or unfocused strategy, as those messages play into the hands of its many mighty rivals, including Google, Cisco, IBM, Oracle, Salesforce.com, Apple and Amazon.