Beyond 12,500 former Nokia employees, who else is Microsoft laying off?

Beyond 12,500 former Nokia employees, who else is Microsoft laying off?

Summary: The former Nokia employees who joined Microsoft in April are bearing the brunt of Microsoft's just-announced layoffs. But other teams across the company will be hit, too.

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The biggest group affected by Microsoft's July 17 layoff of 18,000 people are the 12,500 former Nokia employees who joined Microsoft as part of the Nokia handset acquisition.

That leaves another 5,500 Microsoft employees, out of its current workforce of close to 130,000, who are being let go. Who are these individuals?

Microsoft officials are declining to comment, unsurprisingly, beyond saying about 1,351 of all those cut will be based in the Seattle region. But sources close to the company said that the cuts are affecting just about every group at the company, everything from legal to Xbox. 

Microsoft's unified Operating System Group, under Executive Vice President Terry Myerson, is one of the units that will be affected immediately and directly, sources say. Myerson's team will begin making some of the organizational moves that other teams at Microsoft already have undertaken.

Specifically, Myerson's group will be undoing the functional management structure, put in place under CEO Steve Ballmer and former Microsoft Windows chief Steven Sinofsky, I hear. For the past seven-plus years, Windows was structured around a program management/development/software testing structure -- a structure some felt created silos.

CEO Satya Nadella is making the investment of core engineering tools a top priority as part of his new strategies for the company. That means he is prioritizing non-sexy internal-facing tooling for things like source code control, collaboration management, and code sharing across divisions, I hear from my contacts.

Under the new structure, a number of Windows engineers, primarily dedicated testers, will no longer be needed. (I don't know exactly how many testers will be laid off, but hearing it could be a "good chunk," from sources close to the company.) Instead, program managers and development engineers will be taking on new responsibilities, such as testing hypotheses. The goal is to make the OS team work more like lean startups than a more regimented and plodding one adhering two- to three-year planning, development, testing cycles.

Like the Cloud & Enterprise team did recently, the OS group will be changing its ratios of dev/testers to program managers and requiring those remaining to learn new skills. The resulting structure should be flatter and more agile, if all goes according to Nadella's plans.

Microsoft's sales and marketing teams also will be impacted by the layoffs.

Again, I am not sure how many people we are talking, but Chief Operating Officer Kevin Turner told the thousands of Microsoft sales, marketing and services (SMSG) employees under him that the company will be "selectively streamlin(ing) HQ (headquarters) functions."

The plan is for that team to "reduce our reliance on contingent staff augmentation by over 20 percent year-over-year, said Turner in a July 17 e-mail to the troops, according to my sources. Microsoft will continue to integrate field sales and marketing into SMSG as part of the realignment.

It's worth pointing out that different teams at the company, going forward, will be organized differently. 

The same structure and pace that makes sense for the operating systems teams doesn't make sense for the hardware unit or Bing. There won't be a single new engineering model across the company. Each of the Corporate Vice Presidents will be tuning their units differently.

Even before he was named CEO, Nadella was focused on how Microsoft could "modernize" engineering inside Bing, and later, inside the Cloud & Enterprise unit. The Operating Systems Group make-over is next up. That's why the first round of layoffs may feel as though they are disproportionately affecting this group, according to one of my contacts. 

Topics: Mobility, Cloud, Microsoft, Windows, Leadership

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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88 comments
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  • standard herd thinning

    Targeting people with the lowest performance reviews OR anyone else they don't like... across the board percentage allows pretty much anyone for any or no reason at all via RIF.
    greywolf7
    • Perhaps...

      This may be a way of punishing some of those responsible for the poorly received Windows 8.x operating system.

      At the very least to cut costs because of that poor reception.
      donw1234
      • Yeah, that's it...

        "primarily dedicated testers, will no longer be needed."

        You wrote: This may be a way of punishing some of those responsible for the poorly received Windows 8.x operating system.

        Drats, I was hoping they would announce they were laying off LoveRockDavison and OwlNet+
        BoxOfParts
        • Sigh

          That was my first thought too and I was pretty excited about it.
          GrumpyOldMan
      • If a product (Win 8) is not welcome by the market,

        it will cause seriouse consequences.

        But i think cutting people is not a good strategy, it should be useing those experienced people to make more money
        SmilingGuy
        • Cutting people sometimes IS a good strategy

          Microsoft is enormous and not exactly a model of lean efficiency. Cutting people is sometimes a good strategy if a company has too many people for the job they're doing.

          Other than slashing the Nokia workforce, this is a pretty modest layoff93 compared with Microsoft's total headcount, and given that it only affects 1300 people (3% of theit workforce) in the Seattle area, I expect the bulk of the remainder are in China and India.
          Tessieee
    • There is So Much Dead Wood That This Will Hardly Make a Dent

      Microsoft has so much dead wood this will not even make a dent. If they did not have the governement granted monopoly known as Windows and Office, they could never compete on the merits in any other product space. But every company is held captive to them because of Windows desktops and servers. Microsoft rarely wins when they have to compete on the merits of their products. Captive purchasing managers in corporations throughout America and the NSA's desire to have every retail consumer on a desktop that provides "open Windows" is what grew and then sustained this company for the last 15 years. The phone and device market shows that when consumers have a choice, they rarely choose Microsoft. Consumers are not like captive purchasing managers in corporations; they decide on the merits of the product.
      dh75204
  • Article: "dedicated testers, will no longer be needed"

    Microsoft has been dinged as of late with problematic patches. This is, potentially, a very big change and could have a detrimental impact on the progress Microsoft has made with its Security Development Life-cycle (aka SDL) and could also adversely impact product reliability.
    Rabid Howler Monkey
    • The pale truth: we don't need Microsoft in 2014

      So let the Neanderthal die. We don't need Windows and other M$ crap.
      MacBroderick
      • You demonstrater clear and precise, Neanderthal thinking.

        In fact, you are clearly a moron.
        adornoe@...
        • Neanderthals were morons?

          Not according to these researchers:

          "Neanderthals ‘no morons’, study finds"
          http://www.theaustralian.com.au/higher-education/neanderthals-no-morons-study-finds/story-e6frgcjx-1226901281108?nk=44072b48fb1093f921eb2be4d62438c2

          Nice of you to bring up the topic, though. It remains to be seen whether Microsoft can save Windows Phone 8 (as well as future releases) from extinction.
          Rabid Howler Monkey
          • Most of that "research" is guess work, but, the word "Neanderthal" has been

            used for ages, to mean "lacking intelligence".

            So, if any true Neanderthals amongst the current populations of the world felt insulted by my statement, I do not apologize (you should all be extinct). ;)

            Regarding WP8, it's not really doing that badly, considering what it's got to battle against. But, the battle is really just getting underway. Remember that, MS had another project which people wanted MS to scrap after just a few short years, and now, it's one of the biggest hits in technology. Ever hear of the XBox? Nobody should ever give up on a project after just a few short years, especially when the sector is very volatile and still young.
            adornoe@...
      • Really?

        I'm a *nix (OS X and Linux) user at home and at work and I can see the value of Microsoft. They have hardly outlived their usefulness and will continue to innovate and do blue sky research so long as they are in business. Wishing death on one of the old guard is disingenuous and shows a complete lack of forethought and a disconnect with the tech and science. MS has done many bad things in it's history that I'll never forgive them for but they do have a place in the modern world.
        GermanyChris
        • I would that in innovated more

          But the field in which MS has been the most innovative over the past 12 years or so has been IP trolling; but if legal is going to be cut heavily,. then perhaps that operation is thankfully on the chopping block.

          MS should sell software and maybe hardware and services. But if it does insist on staying in the protection racket, then it should give its "customers" at least as much for their money as Mafia families do (protection from hostile third parties).
          John L. Ries
          • Seems you've been asleep....

            for the past 20 years. Name one other company that has done more for business than M. You should get in to IT so you can speak from experience instead of ignorance. Or just stop posting.
            kstap
          • IBM.

            Simple answer there.

            Just one of their mainframes can replace several hundred (and the larger one, thousands) of the run-of-the-mill Windows servers.
            jessepollard
          • re:

            IBM. Huh. Speaking of living fossils...
            Sir Name
          • IBM????

            Not sure you are accurate in your comparison. An IBM Mainframe running SQL Server... exchange... SharePoint... I think these are two completely different products that have nothing to do with each other...

            Why would an IBM mainframe (not sure IBM calls then that) do anything a Windows Server does?
            apetti
          • Better to focus on functions...

            ...than specific products.
            John L. Ries
          • apetti: "An IBM Mainframe running SQL Server... exchange... SharePoint..."

            IBM System z mainframes are capable of running Microsoft Windows. Therefore, they can run Microsoft server-based products that run on Windows:

            http://www-03.ibm.com/systems/z/os/index.html

            Imagine that! A company that runs more than one operating system on its hardware ... :)
            Rabid Howler Monkey