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

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.
Written by Mary Jo Foley, Senior Contributing Editor

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. 

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