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Microsoft has been posting record revenues this year, but CEO Satya Nadella says the organization needs to "evolve" to "to bring our ambitions to life." I wonder what he means by "our."
First, we will simplify the way we work to drive greater accountability, become more agile and move faster. As part of modernizing our engineering processes the expectations we have from each of our disciplines will change. In addition, we plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers. In addition, our business processes and support models will be more lean and efficient with greater trust between teams. The overall result of these changes will be more productive, impactful teams across Microsoft. These changes will affect both the Microsoft workforce and our vendor staff. Each organization is starting at different points and moving at different paces.
In 2012, median pay at Microsoft was estimated to be around $91,500. (Its employees were also ranked among the "least loyal.") With with 18,000 jobs gone, that's over $1.6 billion in savings for the company. Nadella is talking about pulling factory and office jobs—but based on his remarks about streamlining management, there seem to be a lot of white-collar jobs on the chopping block.
Microsoft supposedly expects to shell out between $750 million to $800 million for severance pay and benefits.
The Puget Sound Business Journal, quoting venture capitalists, argues that the job cuts will actually be good for the Puget Sound economy in the long run—in part because "talent being released" will goose the startup world, but more generically because "a strong Microsoft is vital" for our economy.
Again, one wonders who counts as "our."