Microsoft to Make Biggest Round of Job Cuts in 5 Years. Is CEO Satya Nadella Truly Committed to Xbox?

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Right at the stroke of midnight EST, Bloomberg reported that the Microsoft Corporation is planning to make its biggest round of job cuts in five years in order to help integrate Nokia Oyj’s handset unit within Microsoft. Various individuals familiar with the company’s plans have provided some commentary and insight, though they have chosen to remain unnamed due to plans not being solidified or official just yet.

Job cuts and reductions, while not specifically listed, will likely be in the areas of Nokia and other Microsoft divisions that overlap with it. Marketing and engineering, in particular, are mentioned. Back in 2009, Microsoft cut approximately 5800 jobs. This upcoming restructuring, which may come as early as this week, has the potential to top 2009’s recession-inspired spring cleaning.

Some of the job cuts will be in marketing departments for businesses such as the global Xbox team, said the people. The European Xbox team is based in Reading, U.K.

Now as of June 5th and the acquisition of Nokia’s Oyj, Microsoft has 127,104 employees under its name. Unfortunately,with such a large number, some positions likely overlap, and these are the ones most likely to suffer cuts. But, if there’s one thing I speculate it is just how much overlap there is between jobs dealing with Nokia and those dealing with Xbox. While Microsoft likely has people who work on both, it begs the question of just how many (if any at all) are actually double-dipping in both Nokia and Xbox. If indeed, there isn’t as much overlap as one might assume, then it seems as though that is an added shield protecting individuals under the Xbox branch.

When Microsoft agreed to acquire Nokia’s mobile-phone business in September, the software maker pledged $600 million in annual cost savings in the 18 months after the deal closes. Meeting that commitment will probably involve job cuts in areas where the two companies overlap, said the people. Other job cuts may result from changes Nadella is making to the engineering organization, people with knowledge of the matter said last week.

Engineering teams have traditionally been split between program managers, developers and testers. Yet with new cloud methods of building software, it often makes sense to have the developers test and fix bugs instead of a separate team of testers, Nadella said in an interview last week after unveiling his memo.

Naturally, some cuts will be coming for software testers who are no longer seen to be as necessary. Engineers undoubtedly exist all over Microsoft, whether it be in Windows, Nokia, or Xbox. According to the above, Nadella has plans to change the engineering organization in Microsoft, but it is unclear if that is in reference to engineers throughout the entirety of Microsoft or in just some areas. Nevertheless, it would be naive to assume that Xbox is entirely immune from these plans. More likely than not, Xbox will endure some changes. Hopefully, those changes will neither be large nor severe.

[Source: Bloomberg]

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