Microsoft is said to be cutting up to 10% of its workforce

When Microsoft closed the acquisition of Nokia's handset unit, its headcount swelled by over 25,000 employees. As with many acquisitions, there will be inevitable overlaps and duplication of roles, and Microsoft will be looking to reduce some of that excess down in the very near future.

Prior to the purchase, Microsoft had over 100,000 employees around the world and with the addition of a further 25,000, that's a lot of paperwork for the HR department. It's not really a surprise that Microsoft is looking to reduce its headcount with some estimates suggesting that as much as 10% of its workforce could be released from employment.

These types of cuts are nothing new; with nearly every major corporate acquisition, some staffing has to be cut to reduce redundancy in the organization - you don't need a Lumia marketing department and a Windows Phone marketing department, for example. 

The report states that the announcement of the cuts could come before the company's annual sales meeting that kicks off in late July; not to be confused with its partner conference which is July 14th-17th.

While it is never easy to lay off employees and even harder if you are one of those affected by the move, it is a sad but unavoidable reality of business. Microsoft's year end was June 30th, so that means that employee reviews are currently being conducted, and may well be used as a tool to select existing Microsoft employees as part of the cuts, if indeed they go that deep.

Source: GigaOM​ | Image via @satyanadella

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33 Comments

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First of all, this is rumor. Secondly even if it is true, this "x%" is rarely "let go of people" program unless the company is in economic crisis.

While some would sure be let go, others would be given a certain period of time to look for another job within the company.

Microsoft have a good record when it comes to retaining team members, they rarely downsize or even fire people. The source is dubious indeed, but then nothing stays unchanged forever, it is conceivable MS will at some point "retrench" a considerable number of people, which will be very bad

Patmore Douglas said,
Companies usually cut employees before reporting bad financials. Granted there is a new CEO, but MS always cut employees before reporting bad financials.

I'm just saying ...


No companies usually cut employees when they merge. Go look at any merger from a major company, there has always been job losses. Including when Google bought out Motorola, 10% were laid off.

Nothing new, nothing suprising.

100,000 employees? Why do they need so many for windows, windows phones, engineers and hardware designers. Plus Xbox and developers should not take yo that many

ACTIONpack said,
100,000 employees? Why do they need so many for windows, windows phones, engineers and hardware designers. Plus Xbox and developers should not take yo that many

Microsoft is also into Research, Healthcare, Cyber Security, Consultancy... all the offices around the world... Their products are on enterprise-level and on a massive scale; you don't do that with a handful of engineers per project.

Most of the people working at MS are from workforce-renting companies (Manpower and similar). So the 100.000 are just the real MS employees, should add another 30-50.000 more in reality.

They really just need to get rid of two execs:
Joe B. and Terry M. aka the windows phone exec team now in charge of windows and windows phone. Yup, these are the guys that rebooted the OS just a year into its life, haven't achieve even 10% share, and made WP development go so slow, the windows 8 team almost shipped update 2 by the time joe's team got around shipping vanilla 8.1. oh wait, they haven't shipped it yet even to this day. lol.

This. I seriously can't understand why people like Belfiore so much. The guy has been screwing around for the past few years, doing basically nothing (except his hair). Like you said, Joe and Terry have to go. Also the whole Skype team, they are incompetent (edit: MS has paid 8.5 billion for Skype and we still don0t have a decent WP app). Next, Xbox Music team, XBM app is a disaster. They also have to get rid of their horrible marketing department. Keep the one from Nokia, their commercials are brilliant. Nadella has to start cutting off useless fat. They sure have a lot of it.

amnesiality said,
.... Nadella has to start cutting off useless fat. They sure have a lot of it.

Acquiring 25,000 new employees gives them the breathing room to do just that.

neonspark said,
They really just need to get rid of two execs:
Joe B. and Terry M. aka the windows phone exec team now in charge of windows and windows phone. Yup, these are the guys that rebooted the OS just a year into its life, haven't achieve even 10% share, and made WP development go so slow, the windows 8 team almost shipped update 2 by the time joe's team got around shipping vanilla 8.1. oh wait, they haven't shipped it yet even to this day. lol.

Ermm what? WP8.1 has already shipped, or do my eyes deceive me and you can't get an 8.1 phone now? Ohh wait I can!
Plus the windows phone team have been shipping updates faster than the windows team, notice how update 1 came out rather quickly after they took over.

As for the market share thing, I doubt any MS exec could of done better on that uphill battle.

As Arpit said above, ya this article was pretty insincerely written. Almost every company buyout involves some sort of lay offs. Many companies, such as Google, buy companies simply to shut them down completely cause massacre of job loss. Given that most of Nokia's people are staying with Microsoft, this is simply due to the high cost of too many people and some will simply just get converted to contracted jobs instead of full-time.

recursive said,
They are cutting jobs, not hiring more employees.

They're doing both. Everytime companies merge people get laid off, it's nothing new.

Stop grasping at straws.

@recursive

MS currently has ~2000 open positions that have nothing to do with the acquisition. Is it clear enough for you now?

FUDHater said,
@recursive

MS currently has ~2000 open positions that have nothing to do with the acquisition. Is it clear enough for you now?

Sorry mate, he wont get you with his FOSS glasses and Earphones.

recursive said,
The people in the merger were already employed, they weren't 'hired' by MS.

Stop tainting the truth.


And so? The people with Motorola were already employed when they joined Google. Still 10% of Google's workforce was cut too.

Mergers always result in job losses. The only one tainting the truth here is you.

FUDHater said,
@recursive

MS currently has ~2000 open positions that have nothing to do with the acquisition. Is it clear enough for you now?

Right, and they will all be closed the same day the 10% are fired.

simrat said,

Sorry mate, he wont get you with his FOSS glasses and Earphones.

Ha ha a funny guy

Right, and they will all be closed the same day the 10% are fired.

Yup continue ignoring facts and spewing your blatant ignorance and bias.

Nothing new from you at all.

Is it just me or did this post feel very insincere?

"Prior to the purchase, Microsoft had over 100,000 employees around the world and with the addition of a further 25,000, that's a lot of paperwork for the HR department. It's not really a surprise that Microsoft is looking to reduce its headcount..."

Really? They're letting people go because of HR paperwork?

It's one thing to have an opinion on news, but this feels like mockery. Just report the news as is if your funny bone is struggling.

It's one thing to have an opinion on news, but this feels like mockery. Just report the news as is if your funny bone is struggling.

Well this is Neowin after all.

recursive said,
Brad is just trying real hard to downplay the fact that ms is cutting jobs. Give him some credit.

Yeah because when Google bought Motorola they didn't layoff anyone right? Oh wait, they did...and it was 10% of the workforce too. Shocking I know, companies that aren't MS lay off workers too...

Arpit said,
Is it just me or did this post feel very insincere?

"Prior to the purchase, Microsoft had over 100,000 employees around the world and with the addition of a further 25,000, that's a lot of paperwork for the HR department. It's not really a surprise that Microsoft is looking to reduce its headcount..."

Really? They're letting people go because of HR paperwork?

It's one thing to have an opinion on news, but this feels like mockery. Just report the news as is if your funny bone is struggling.

Wait, what? They're just mentioning that it'll be a lot of paperwork for their HR dept.. How you read it the way you did is beyond me.

pcweber11 said,

Wait, what? They're just mentioning that it'll be a lot of paperwork for their HR dept.. How you read it the way you did is beyond me.


Where are they (Microsoft) mentioning ANYTHING about their HR department at all?

I went to the source and was given a much different picture, from an actual Microsoft insider:

A company insider summed it up: “Look, [Microsoft CEO Steve] Ballmer buys Nokia and adds 25,000 people and a business that makes no money, so do the math.”

The Microsoft insider is not going on about paperwork, but about a tough honeymoon. Much different. And as for an official statement:
A Microsoft spokesman had no comment for this story.

I hope Neowin didn't just make that "reason" up. I think that would be quite serious. And no, I don't think they can't hide behind the unprofessional reporting moniker. They have a responsibility.