Over the next year, Microsoft will eliminate up to 18,000 positions, the company confirmed today. Apparently, it's part of a restructuring plan to "simplify" the organization and "align the recently acquired Nokia Devices and Services business with the company's overall strategy."
"Having a clear focus is the start of the journey, not the end. The more difficult steps are creating the organization and culture to bring our ambitions to life," Microsoft CEO Satya Nadella said in an email to employees.
Of the 18,000 positions to be cut, about 12,500 are from the Nokia Devices and Services business which was acquired by Microsoft on April 25. These cuts will consist of both professional and factory workers. According to Nadella, Microsoft is already moving to start reducing the first 13,000 positions, and the "vast majority" of those affected will be notified over the next six months. Nadella assured that Microsoft will offer severance to all employees impacted by these changes, as well as job transition help in many locations.
"It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas. My promise to you is that we will go through this process in the most thoughtful and transparent way possible," Nadella added.
In his email, Nadella briefly shared the Microsoft's plans going forward, but promised furhter specifics during Microsoft's public earnings call on July 22. Here's the plan so far, according to Nadella.
Our workforce reductions are mainly driven by two outcomes: work simplification as well as Nokia Devices and Services integration synergies and strategic alignment.
First, we will simplify the way we work to drive greater accountability, become more agile and move faster. As part of modernizing our engineering processes the expectations we have from each of our disciplines will change. In addition, we plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers. In addition, our business processes and support models will be more lean and efficient with greater trust between teams. The overall result of these changes will be more productive, impactful teams across Microsoft. These changes will affect both the Microsoft workforce and our vendor staff. Each organization is starting at different points and moving at different paces.
Second, we are working to integrate the Nokia Devices and Services teams into Microsoft. We will realize the synergies to which we committed when we announced the acquisition last September. The first-party phone portfolio will align to Microsoft’s strategic direction. To win in the higher price tiers, we will focus on breakthrough innovation that expresses and enlivens Microsoft’s digital work and digital life experiences. In addition, we plan to shift select Nokia X product designs to become Lumia products running Windows. This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps.