Last week, in a 3,100-word strategic memo to staff, Microsoft CEO Satya Nadella indicated that there would be big changes at the company leading up to fiscal year 2015. Now the Associated Press is reporting that Microsoft will lay off up to 18,000 members of its staff. The company currently has about 125,000 employees in all.
It's the biggest round of layoffs in Microsoft history, the next most drastic being the roughly 5,800 people Microsoft axed in 2009 as the financial crisis raged. The New York Times reports, “Employees at the company’s campus in Redmond, Wash., are already bracing for the news. Human resources managers have begun reserving conference rooms for most of Thursday.” (There is a company-wide town hall meeting scheduled for Friday, though it is a standard meeting that has been scheduled for awhile, and its timing is seemingly a coincidence.)
The author of the well-known company gossip blog Mini-Microsoft (which has been quiet over the past year) was known for advocating that Microsoft downsize significantly—as much as 10 to 15 percent. In 2004, one post read, “Microsoft needs to reduce employee size. It’s too big ... it needs to get itself on a corporate exercise program that will shed itself of unwanted groups and employees. And stay on that.”
In his memo last week, Nadella wrote, “I am committed to making Microsoft the best place for smart, curious, ambitious people to do their best work ... Every team across Microsoft must find ways to simplify and move faster, more efficiently. We will increase the fluidity of information and ideas by taking actions to flatten the organization and develop leaner business processes.” Getting rid of 18,000 people is certainly one way to trim the fat.