Microsoft layoffs impact 18,000

Microsoft has announced layoffs of 18,000 employees from the 128,000 employees currently in their workforce. Many of the job cuts are a result of Microsoft’s acquisition of the Nokia phone business, with approximately 12,500 coming from employees that were formerly with Nokia. This is half the 25,000 employees that recently came to Microsoft when the sales was recently completed. The remaining 5,500 jobs are being cut from across the company in areas such as engineering and marketing. This past week the company started to eliminate 13,000 of the total, and the remaining 5,000 will be eliminated over the coming six months.

While the human impact for the 18,000 is quite real, the resulting company will likely be more nimble and should be able to compete more effectively in the marketplace. Microsoft is no longer simply competing for operating systems on desktop and notebook computers. They are struggling to gain a foothold in the mobile marketplace dominated by iOS and Android devices. They are trying to maintain relevance in the cloud, competing against Amazon Web Services, Google, and newcomers such as Box.

With these recent cuts and Microsoft’s attempt to refocus their business, the following scenarios are likely to occur:

• Microsoft will work more quickly to integrate cohesive cloud services into their desktop and mobile platforms.
• Expect to see their Office franchise of apps available on more operating systems – not just Windows and MacOS. These will expose more users to Microsoft cloud offerings, which will be connected to these apps once they are made available.
• A more responsive Microsoft that adapts more quickly as the market changes and new technologies emerge.
• An end of trying to fit the same operating system on every type of device, from tablet to desktop, as they did with Windows 8.
• A company that, like Apple, is less focused on creating individual apps, and becomes fully focused on getting developers to use their cloud services and develop for their platforms, using Microsoft tools. Applications other than Office aren’t likely to be embraced, and will be left for third-parties, whether they are the size of Adobe Systems or small startups. We’re already seeing this in one area hit by the layoffs, Microsoft’s Xbox Entertainment Studios, which is closing and plans for creating original TV programs for Xbox Live will be shelved.

The 110,000 employees that remain will still be working for one of the largest companies anywhere. They will need to provide compelling tools, products, and services to win clients away from iOS and Android, and move cloud customers to their Azure offerings.

Microsoft also needs for their developers to create compelling applications that are differentiated from what’s available on other platforms. Many developers creating applications for Windows and Windows Phone, including Microsoft employees, have taken the user experience courses at American Graphics Institute. Microsoft needs to continue to provide clear reasons for third-party app developers to create on the Microsoft platform that goes beyond the existing development tools and user experience. A growing audience for their platforms is needed to attract developers, and well-designed applications are needed to attract that audience.