At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.
This is a widely circulated statement, and is clear direction for Nadella that the future of Microsoft lies in two areas: mobile and the cloud. That’s smart, because that’s where the future of computing really is right now.
Microsoft already has strong support in the cloud space and is getting better, but they have been weakest in mobile as the Ballmer era strategies face planted.
The first step to building the right organization for our ambitions is to realign our workforce. With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year. Of that total, our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers. We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months.
In other words they are firing 12,500 from Nokia’s workforce — you know the more successful mobile division of Microsoft. That seems to contradict the strategy, but Stephen Elop explains further:
We plan to right-size our manufacturing operations to align to the new strategy and take advantage of integration opportunities. We expect to focus phone production mainly in Hanoi, with some production to continue in Beijing and Dongguan. We plan to shift other Microsoft manufacturing and repair operations to Manaus and Reynosa respectively, and start a phased exit from Komaron, Hungary.
Ok so this isn’t so much about firing the people making great mobiles devices… oh wait, no, it is about firing them, but keeping the ones thinking up those devices.
This is a rough move, essentially Microsoft doesn’t want that large of a manufacturing arm, and it’s hard to blame them for that, but it’s also really stupid timing.
My criticism isn’t the easy play that they are firing 12,500 Nokia employees after claiming to be mobile first — it’s that they made these announcements too close together without laying out their strategy going forward clear enough. ((Nadella’s memo amounted to little more than a pile of bullshit.))
And that is a problem of the worst kind: it is a leadership problem. A lot of people are liking Nadella, but I’ve never been fond of him being CEO and I think this moment is the most crucial for him. So far, he is not handling it well.