Microsoft braces for job cuts

Steve BallmerMicrosoft Chief Executive Satya Nadella has issued an email warning that he will “flatten the organisation and develop leaner business processes”,

Normally that is the sort of announcement which is a prelude to huge job cuts, wringing of hands, and little voles being cast out into the cold and the snow.

But it seems that Nadella is in no hurry to make his full announcement. It seems that he is waiting until July 22 when he will announce Microsoft’s quarterly earnings.

After buying Nokia, Microsoft has 127,000 employees, which makes the outfit far bigger than Apple and Google. Nadella clearly needs to make some cuts, but this will mean Vole’s first major layoffs since 2009.

In a 3,105-word memo sent to employees today and posted on Microsoft’s website Nadella set out his vision for the company five months after taking over as CEO from shy and retired Steve Ballmer.

He described Microsoft as a “productivity and platform company” focused on mobile and cloud computing. This is a little different from Ballmer’s reinvention of Microsoft as a “devices and services” company, which could signal less emphasis on manufacturing hardware.

“Nothing is off the table in how we think about shifting our culture to deliver on this core strategy,” Nadella wrote in the memo.

Nadella has asked his managers to “evaluate opportunities to advance their innovation processes and simplify their operations and how they work”,

In other words, they will have to choose who will have to go.

He did not address the unprofitable Bing search engine directly in the memo. Investors want Microsoft to ditch the software, but Nadella so far has seen the software as having a point.