In a bid to have a faster decision making system, revamping the company structure and culture Satya Nadella, the new head has confirmed 18,000 job cuts. The bold and ambitious move comes in the wake of rectifying errors of his predecessors. His inheritance sure comes with a loss that he needs to make good. This figure is tantamount to 14% of the company’s workforce, and creates a history as the largest layoff ever.
The phone and tablet divisions will see about two-thirds of the cuts. Discounting the overlapping Nokia staff, he further intends to cut 5,500 people. So far there has been no comment from Gates, or Ballmer on this issue.
These layoffs and \"asset-related\" charges are likely to increase pretax earnings by USD 1.6 billion in the coming year.
Furthermore, Nadella intends to re-organize Microsoft’s engineering department and shut down the expensive project Ballmer started which planned to create a programming like television for its Xbox consoles. He has also stopped the Nokia smartphone project which was powered by Android systems.
The job cuts for Microsoft are not an indicator of a financial turmoil, but rather executing the freshly gained retrospective wisdom. After Mr. Nadella came to the throne, company\'s stocks have only done better and better on the market indices, with an estimation of growth in the sales of personal computer by the end of this year. Executives hope that Nadella will rise to the challenge of making Microsoft, once again, relevant to the technology industry.