Microsoft’s record layoffs have picked up negative attention from governmental authorities and leaders, even as the cuts have been largely welcomed by investors and the broader market.
The software company accreted more than 20,000 employees when it acquired the majority of Nokia’s hardware assets. In the wake of that deal’s closing, Microsoft announced 18,000 cuts to its staff, including 12,500 in its hardware division.
Several tone-deficient memos were circulated to explain the staffing changes.
Sources around and familiar with the Redmond area — Microsoft’s corporate stomping ground — that I spoke to generally indicated that morale was largely intact on the company’s main campus.
That’s reasonable, of course, as only a touch over 1,000 layoffs will hit Microsoft’s Washington-based staff. Unless, of course, you are merely a Microsoft-adjacent employee, in which case you should expect layoffs and restrictions in access.
While the firings — let’s call them what they are — might make business sense for Microsoft, as it hopes to both flatten its organization and build a development process that is more nimble, not all are fans of its actions. Senator Jeff Sessions recently lit into Microsoft, expressing something akin to outrage that the company would at once press for more high-skill visas so that it could hire foreign workers at home, while letting its own staff go.
An excerpt:
Microsoft confirmed it will cut up to 18,000 jobs over the next year, part of the tech titan’s efforts to streamline its business under a new CEO.’
That is a significant action. Indeed, Microsoft employs about 125,000 people, and they are laying off 18,000. The company laid off 5,000 in 2009. Yet their founder and former leader, Mr. Gates, says we have to have more and more people come into our country to take those kinds of jobs.
It is pretty interesting, really. We need to be thinking about what it all means and ask ourselves: What is the situation today for American graduates of STEM degrees and technology degrees? Do we have enough? And do we need to have people come to our country to take those jobs? Or, indeed, do we not have a shortage of workers, and do we have difficulty of people finding jobs?
The senator is conflating job cuts that will land heavily overseas at an international company with domestic hiring restrictions, but you can understand the source of his antipathy.
Sen. Sessions isn’t alone in his unhappiness. Finnish authorities and the European Commission are not enthused with Microsoft’s layoffs in their country and union, respectively. Here’s the EU Commissioner László Andor:
I deeply regret the significant job losses announced by Microsoft today because of the impact these will have on so many individuals, their families and the local communities they live and work in. All sectors of the economy are undergoing changes as technology develops and consumer demand evolves. Company restructuring is a fact of life but it should be done in a socially responsible way, based on social dialogue and with due respect for applicable legislation on the information and consultation of workers and on collective redundancies
Microsoft has noted that it will sustain something in the range of $1.1 billion to $1.6 billion in costs associated with the layoffs and other conclusory episodes over the next year. I leave the moral-dollar work to you to calculate on a per-fired-employee basis.
What’s clear, however, is that despite governmental discontent, Microsoft is full speed ahead on its efforts to reform itself after changing its corporate strategy.
Microsoft reports earnings on Tuesday.
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