When Microsoft CEO Satya Nadella announced a shift last week in a 3,100 word email, he was serious. Today, in an email he announced over 18,000 job cuts spread in 12 months, and you might be affected.
“The first step to building the right organization for our ambitions is to realign our workforce. With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year,” Nadella wrote. “Of that total, 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.”
The firm will in the next six months notify employees over the first 13,000 positions to be elimated in phase one. Workers will walk home with severance, job transition help and they might even applu for new positions set to be created in the company.
Microsoft will be a lean organization with one manager leading a huge pack of its workforce. The firm will also reduce its vendor staff. The Nokia Devices and Services teams will be integrated into Microsoft and the firm will shift select Nokia X product designs to become Lumia products running Windows with a focus on having Windows Universal Apps.
In an email, Stephen Elop said the Microsoft Devices Group’s fundamental focus is phones, the Surface, PPI, Xbox hardware among others but the devices arm has to work under Microsoft’s budget.
“We will be particularly focused on making the market for Windows Phone. In the near term, we plan to drive Windows Phone volume by targeting the more affordable smartphone segments, which are the fastest growing segments of the market, with Lumia. In addition to the portfolio already planned, we plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices. We expect to make this shift immediately while continuing to sell and support existing Nokia X products,” Elop wrote in his email to employees.
The aims to consolidate the former Smart Devices and Mobile Phones business units into one phone business unit responsible for all its phone efforts. The phone business unit will be led by Jo Harlow and will be responsible for Lumia products, the transition of select future Nokia X products to Lumia and for the ongoing operation of the first phone business.
Microsoft will concentrate its phone engineering efforts in Salo, Finland (for future, high-end Lumia products) and Tampere, Finland (for more affordable devices) while Oulu will be ramped down and engineering in Beijing and San Diego will reduce ut only run affordable devices in Beijing and supporting specific US requirements in San Diego. Espoo and Lund are planned to continue to be focused on application software development. Phone production will be mainly in Hanoi, with some production to continue in Beijing and Dongguan while other Microsoft manufacturing and repair operations will be shifted to Manaus and Reynosa respectively, and start a phased exit from Komaron, Hungary.
At the end of the bleeding, Elop’s team would have reduced by 12,500.