Beleaguered Microsoft’s 18,000 layoffs the beginning of a painful attempt to clean up Ballmer’s mess, says Street

“Shares of Microsoft are up 63 cents, or 1.4%, at $44.72, after the company this morning said it would eliminate 18,000 positions, or 14% of its workforce, as part of a way to ‘evolve our organization,’ as CEO Satya Nadella described the matter,” Tiernan Ray reports for Berron’s.

“12,500 of the jobs eliminated will be in the former Nokia devices division, the company said. The cuts equal about half of Microsoft’s Nokia division, according to analysts, and 6% of the core work force,” Ray reports. “Microsoft will take a $1.1 billion charge, over multiple quarters, to carry out the layoffs, it said. The deal is expected to be mostly complete by the end of the year but not fully complete until next summer.”

Ray reports, “In early reviews, FBR & Co‘s Daniel Ives, who has an Outperform rating on the stock, and a $68 price target, writes that the Street will like the fact Nadella is cleaning up the ‘mess’ Steve Ballmer left behind: ‘We believe this is about double what the Street was expecting, and while the cuts will be painful for employees, they were necessary, in our view, and speak to Nadella’s attempt at cleaning up part of the mess that Ballmer left behind in Redmond. Under the Ballmer era there were many layers of management and a plethora of expensive initiatives being funded that has thus hurt the strategic and financial position the company is in, especially in light of digesting the Nokia acquisition.'”

Read more in the full article here.

MacDailyNews Take: Don’t kid yourself remaining Microsoft employees and investors: This is just the beginning. This first round of cuts is merely “cleanup in aisle 7.” Clueless Ballmer trashed the entire grocery store (ate at least half of it, too) and had started chewing up the parking lot before they finally showed him the door.

Stephen Elop and Steve Ballmer
Two cretins smiling idiotically
In related news:

“Earlier this year, Stephen Elop [former CEO of Nokia and the current head of Microsoft’s devices and services division] came under heavy criticism in the Finnish press after it was revealed that Nokia employees would not be receiving any bonuses for their work in 2013 even though at the same time Elop made a whopping $25 million bonus that year for overseeing the merger between Microsoft and Nokia,” Brad Reed reports for BGR. “Nokia board members apparently pleaded with Elop to take a smaller bonus but he refused because he said he needed that money to pay for a pending divorce with his wife.”

Read more in the full article here.

MacDailyNews Take: Despicable.

As we wrote last Friday:

This is what happens when a company that desperately needed new direction from new blood instead stupidly and cowardly hires from within (not that is wasn’t too late already regardless).

This is what failure looks like. Apple roadkill.

Revel in the endless beauty of what Steve Jobs and co. have wrought. This vast, growing ocean of schadenfreude shall sustain us forever.

Sleep tight, Satya.

Related articles:
Beleaguered Microsoft to axe up to 18,000 employees over the next year – July 17, 2014
Beleaguered Microsoft CEO lays groundwork for mass layoffs, yet another rearrangement of the deck chairs – July 11, 2014
Beleaguered Microsoft’s Windows Phone: Dead as a doornail – July 9, 2014
Apple is well on its way to devastating Microsoft – July 7, 2014

21 Comments

  1. It’s amazing and disgusting what the super-mega-rich can convince themselves that they “need”. People manage to get divorced every day without having to spend $25 million to do it.

  2. > Elop made a whopping $25 million bonus that year for overseeing the merger between Microsoft and Nokia

    What? I got a “bonus” for that? Didn’t he also get a so-called “severance” payment (even larger) for no longer being Nokia CEO. It’s not like he got fired by the Board…

    Elop – Surprise, I got Microsoft to buy us (bonus), and since I’m no longer CEO, pay me some more (severance). And by the way, I get a VP-level position at Microsoft.

    Amazingly outrageous…

  3. As I said earlier the market loves them sacking people it saves money, so sacking twice the amount they expected makes them twice as happy. The fact that it means most like that while you may be better to placed to milk your existing ingrained platform it reduces your ability to replace it as the future of tech demands and thus eventually you decline as your existing business declines.

  4. Has Balmer made more money AFTER he retired than the entire time he was CEO?

    His stock when up 1.4% today so if he holds 10bil in MSFT, today made 140million TODAY.

    Too bad 18,000 lost their jobs including about “half” of the Nokia people.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.