Microsoft Cuts 3,000 Jobs Worldwide, About 600 In The Puget Sound Region
Microsoft has given layoff notices to 3,000 more workers worldwide, with 638 of them in the Puget Sound region, according to a spokesman for the company.
The cuts are part of the company’s plan announced in July to eliminate 18,000 jobs worldwide, largely stemming from the acquisition of the cellphone maker Nokia.
But IDC analyst Al Hilwa said the company is also trying to streamline decision making to move faster and react more quickly to technology shifts.
“When Microsoft took its pulse and temperature, they came up with that diagnosis — that they have too many layers and too many inside groups fighting against one another. And as part of that overall reorganization, they have to thin down the staffing,” Hilwa said.
Satya Nadella took over as chief executive in February, succeeding Steve Ballmer. When he first announced the layoffs last summer, he told employees that the company is reducing layers of management to be able to move more quickly.
Hilwa said there may also be another reason for the headcount reduction — to help offset the large amount of money Microsoft is pouring into expanding its cloud computing service.
“That investment is going to eat into the profitability as well, so they want to do what they can to keep those impacts minimal and they want to be as efficient as possible,” Hilwa said. “That’s how they’re probably thinking about this.”
Microsoft is still highly profitable and generated more than $4.5 billion in net income in the most recent quarter, but that was down from last year.
Hilwa said investors want the company to focus on profits, and job cuts are seen as a way to accomplish that. Microsoft said the most recent round means the company is almost finished carrying out the 18,000 layoffs announced in the summer.