Software and Cloud Services Provider Microsoft to Downsize with an Eye on the Cloud

July 17, 2014
Software and Cloud Services Provider Microsoft to Downsize with an Eye on the Cloud
Software and cloud services giant Microsoft is to downsize with an eye on the cloud. Satya Nadella, the corporation's Chief Executive Offer (who took over from Steve Ballmer on February 4, 2014) has announced a new global strategy that means Microsoft will lose 18,000 sales, marketing and engineering staff worldwide. A deadline of June 30, 2015 has been suggested, and the downsizing will cost the company around $1.6 billion. 13,000 staff will be effected immediately and they will be notified of the corporation's decision over the next six months.

The plans represent the most severe restructuring in Microsoft's history, affecting 14% of its workforce. The changes will allow Nadella to incorporate Microsoft's recently acquired Nokia Oyj’s handset division into its structure, and generally enhance Microsoft's efficiency. However, 12,500 Nokia staff will be included in the downsizing. The move is a response to mobile and Internet competitors that Nadella perceives as operating more effectively. News of the restructuring gave Microsoft shares a 2.8% boost on the New York stock exchange.

The move is designed to make Microsoft "more agile and move faster", suggested Nadella on the company's website. "As part of modernizing our engineering processes the expectations we have from each of our disciplines will change," he added. "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."

What do you think of Microsoft's restructuring? Let us know your views. Add your comments below.

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