Microsoft Layoffs Painful Requirement to Restore Efficiency

By Wayne Rash  |  Posted 2014-07-20 Print this article Print
Microsoft Layoffs

While high-end Nokia phones still cost a lot to make, that doesn't have to be the case for phones aimed at developing economies. The same basic phones that are being used for cheap Android devices can run Windows instead, and sell for the same prices. What really happens here is that Microsoft simply has one platform to worry about instead of two. This, in turn, increases efficiency and decreases costs.

The layoff of so many Nokia employees was expected. When Microsoft or any other company acquires another, you can assume that duplicate positions will be eliminated. In addition, if the acquisition results in a revised mission, any employees supporting the old mission (feature phones, for example) will be dismissed.

Microsoft is eliminating a number of staff positions beyond Nokia. Many of those positions are layers of management that simply don't need to exist.

Microsoft's staffing under the old order was focused around small teams made ineffective by a combination of stack-ranking and a lack of authority on the part of managers to do much of anything.

The result is that few decisions were made, the best employees were frequently fired or departed in frustration, and communications internally were nearly nonexistent. Apparently, Satya Nadella figured this out after taking over as CEO and decided to do something about it.

Assuming that Nadella achieves his intended organizational goals, Microsoft will become more efficient and agile, which is a good thing. But even if many of the people laid off are the wrong ones, those people may follow a pattern predicted by the Bellevue Reporter, and will result in a new wave of very smart entrepreneurs suddenly flush with severance money that they'll use to create startups.

But despite all of the predictions of doom, these layoffs are most likely good for Microsoft. They'll allow the company to focus on the mobility solutions it thinks will provide the best return, while not being saddled by those that don't contribute to the company's long-term market strategy.

But nothing in Microsoft's actions points to major changes such as selling off the phone business. While it's likely Microsoft may outsource some of the manufacturing to China, especially the low-end devices, the only way for Microsoft to make sure that Windows Phone devices get made is to make them itself.

Remember, Microsoft's long-term goal is a unified Windows on all devices from desktops to wearables. For this to happen, handsets running Windows Phone are a necessary component of the strategy. Closing that part of the business down when phones are so important to enterprise users simply doesn't make sense.



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