“Starting to Evolve Our Organization and Culture” reads Nadella’s latest mail to his employees which details Microsoft’s 18,000 job cuts next year. The Redmond based software giant has just announced that it wants to go lean and agile, in an effort to re-align with the company’s new vision, a product of the new leadership headed by Satya Nadella. Out of the 18,000 job cuts, 12,500 are from Nokia’s devices and services division the company acquired recently. This completely sends home the point that Microsoft is no longer interested in making phones, as the majority of Nokia’s full time working staff are from manufacturing facilities the company has, around the world.
Satya Nadella gives two main reasons for the company’s decision to announce these job cuts –
- “drive greater accountability, become more agile and move faster”
Microsoft wants to be faster in execution and be more agile, but with a natural byproduct of job cuts that mostly don’t align with the overall vision. This also means organizational changes like a flatter leadership structure, with managers managing more people than before, which they hope will driver more impact.
- “to integrate the Nokia Devices and Services teams into Microsoft”
The Nokia acquisition was a big deal for Microsoft, as it had just acquired one of the most well known mobile phone manufacturers in the world. The bigger deal is that by “integration” Microsoft means 12,500 job cuts out from the Nokia part of the company. This officially ends all doubts of what Microsoft were going to do with Nokia, as a device portfolio rarely made sense for a company like them.
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.
But there will be flagship devices under, hopefully, a single brand, with focus on innovation, they say. Nokia X too gets a mention here, as the “Android-running” designs will become Lumias running Windows Phone, but notice the world “select” which might mostly mean one.
Both the reasons are understandable from a strategic point of view, but the decisions that have led to these changes were governed by the inaction to market forces, largely by both the companies’ leadership. But there is no meaning in pointing fingers right now as we can only hope that the people affected by these job cuts get better opportunities, at least.
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