Microsoft's big cuts: 5 things to know
Nancy Blair, USA TODAY 12:50 a.m. EDT July 18, 2014
SAN FRANCISCO — Freshman Microsoft CEO Satya Nadella swung a big axe on Thursday as he announced job cuts of up to 18,000 over the next year — most leveled at its newly acquired Nokia division. Here are five things to know about the big move.
1. Nokia hit hard. Microsoft and Nokia face a tough road in smartphones. Microsoft's mobile efforts have not come close to the achievements of Apple with its iPhone and iPad juggernauts, or Google with its vast army of Android phones and tablets. More than 12,000 Nokia workers will lose jobs.
Microsoft paid $7.2 billion for Nokia in a deal struck under former CEO Steve Ballmer. Look to Nadella to make sense of Windows Phone and fit it into his mission of "one Windows" across phones, tablets and PCs with a heavy emphasis on helping users in businesses and at home "get stuff done," the company's recent rallying cry around productivity.
2. The Nadella mission. Since taking over as CEO in February, Nadella has stayed on message. In public appearances, he has insisted he can mold the software behemoth into a more nimble company able to take on a competitive world dominated by mobile devices.
"Mobile-first, cloud-first" has been his mantra. In hardware, that means Microsoft will focus on showcasing products like its new flagship Surface Pro 3 tablet. The company had Apple in its crosshairs when it introduced the tablet, making plain that it is meant to duke it out with Apple's popular MacBook Air notebook computer. But Nadella also is loathe to take on too directly its longstanding hardware partners HP, Dell, Lenovo and others.
3. The numbers. The layoffs are Microsoft's largest ever. The 12,500 jobs targeted at Nokia represent nearly half of the 28,000 employees Microsoft brought on board through the acquisition. When the cuts are complete, the company will still have about 10,000 more employees than before the Nokia acquisition, with an overall headcount of 109,000, the Associated Press notes.
The financial hit: Microsoft expects charges of $1.1 billion to $1.6 billion over the next four quarters, largely for severance payments.
4. Is Nokia done? That's hard to call. Some analysts say Nadella was not a fan of the acquisition. But mobile is a big part of Nadella's vision. Forrester analyst J.P. Gownder noted that Nokia was a logical choice to bear the brunt of cuts based on redundancies.
The Windows Phone operating system has a friendly user interface and a major new update brought an innovative Siri-like digital personal assistant called Cortana. It will be important to see how successful Microsoft is at blending its familiar Windows desktop operating system with new versions of the mobile platform.
There was major consumer resistance to Windows 8 when it launched with an unfamiliar but slick new design interface. With recent updates, the company has been pushing hard to restore some of the familiar Windows features blended into the new design.
5. The stock. Nadella has been CEO for just five months, but he's had a bullish impact on shares, which have soared more than 20% under his watch. The impact on Thursday was more muted. Microsoft shares ended the day up about 1 % at $44.53.
http://www.usatoday.com/story/tech/2014/07/18.../12820077/
Nancy Blair, USA TODAY 12:50 a.m. EDT July 18, 2014
SAN FRANCISCO — Freshman Microsoft CEO Satya Nadella swung a big axe on Thursday as he announced job cuts of up to 18,000 over the next year — most leveled at its newly acquired Nokia division. Here are five things to know about the big move.
1. Nokia hit hard. Microsoft and Nokia face a tough road in smartphones. Microsoft's mobile efforts have not come close to the achievements of Apple with its iPhone and iPad juggernauts, or Google with its vast army of Android phones and tablets. More than 12,000 Nokia workers will lose jobs.
Microsoft paid $7.2 billion for Nokia in a deal struck under former CEO Steve Ballmer. Look to Nadella to make sense of Windows Phone and fit it into his mission of "one Windows" across phones, tablets and PCs with a heavy emphasis on helping users in businesses and at home "get stuff done," the company's recent rallying cry around productivity.
2. The Nadella mission. Since taking over as CEO in February, Nadella has stayed on message. In public appearances, he has insisted he can mold the software behemoth into a more nimble company able to take on a competitive world dominated by mobile devices.
"Mobile-first, cloud-first" has been his mantra. In hardware, that means Microsoft will focus on showcasing products like its new flagship Surface Pro 3 tablet. The company had Apple in its crosshairs when it introduced the tablet, making plain that it is meant to duke it out with Apple's popular MacBook Air notebook computer. But Nadella also is loathe to take on too directly its longstanding hardware partners HP, Dell, Lenovo and others.
3. The numbers. The layoffs are Microsoft's largest ever. The 12,500 jobs targeted at Nokia represent nearly half of the 28,000 employees Microsoft brought on board through the acquisition. When the cuts are complete, the company will still have about 10,000 more employees than before the Nokia acquisition, with an overall headcount of 109,000, the Associated Press notes.
The financial hit: Microsoft expects charges of $1.1 billion to $1.6 billion over the next four quarters, largely for severance payments.
4. Is Nokia done? That's hard to call. Some analysts say Nadella was not a fan of the acquisition. But mobile is a big part of Nadella's vision. Forrester analyst J.P. Gownder noted that Nokia was a logical choice to bear the brunt of cuts based on redundancies.
The Windows Phone operating system has a friendly user interface and a major new update brought an innovative Siri-like digital personal assistant called Cortana. It will be important to see how successful Microsoft is at blending its familiar Windows desktop operating system with new versions of the mobile platform.
There was major consumer resistance to Windows 8 when it launched with an unfamiliar but slick new design interface. With recent updates, the company has been pushing hard to restore some of the familiar Windows features blended into the new design.
5. The stock. Nadella has been CEO for just five months, but he's had a bullish impact on shares, which have soared more than 20% under his watch. The impact on Thursday was more muted. Microsoft shares ended the day up about 1 % at $44.53.
http://www.usatoday.com/story/tech/2014/07/18.../12820077/
