Beleaguered Microsoft announces yet another major reorg; axes up to 3,000 employees

“Microsoft announced a major reorganization on Wednesday that will include thousands of layoffs, largely in sales,” Todd Haselton and Jon Fortt report for CNBC. “Reports from last week suggested this was going to happen and that Microsoft was going to specifically focus on how it sells its cloud-services product, Azure.”

“While Amazon has become a bigger competitor in the space, Microsoft’s restructuring is to pivot to software as a service, platform as a service and infrastructure,” Haselton and Fortt report. “‘Microsoft is implementing changes to better serve our customers and partners,’ a Microsoft spokesperson told CNBC. ‘Today, we are taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated.'”

Read more in the full article here.

MacDailyNews Take: What Steve Jobs hath wrought upon the likes of beleaguered Microsoft – which is currently searching for a new line of work just like 3,000 more of its soon-to-be-ex-employees will be doing shortly – will be forever studied in business schools.

SEE ALSO:
Beleaguered Microsoft to ax ‘thousands’ more employees – July 5, 2017
Beleaguered Microsoft axes 2,850 more employees – July 29, 2016
Microsoft pulls plug on consumer smartphones, axes another 1,850 jobs – May 25, 2016
Cue the funeral for Microsoft’s Windows Phone – April 22, 2016
A single quarter of iPad Pro sales will exceed the total of all Microsoft Surface tablets ever sold – November 24, 2015

26 Comments

  1. Can’t blame any business for tightening the belt, becoming more lean and mean. You know if Apple had done it, everybody here would be falling all over themselves kissing Tim Cooks you know what.

        1. I don’t know about your financial situation, but the “Dick” part seems appropriate. And I’m sure an asshole such as yourself knows all about shit.

  2. “largely in sales”… perhaps cos they don’t have any? When it comes to software Google’s Drive suite is eating their lunch. And Apple’s already eaten their hardware lunch… wait did they ever make hardware? There was the Zune and the Windows phone…

    1. Just purchased a Windows 10 phone, new from Amazon, for just over $60. We have a project where we need to demonstrate the app on a Windows phone to cover all bases.

      I appreciate Mr. Balmer doing all he could over the years to hold down prices on his version of the iPhone with keys when Apple was coming out with their insanely-priced $500 mobile phone. Now there is a CEO every Apple fan can appreciate and support.

    2. Neither statement is true.
      Few businesses actually rely on Google Docs despite years of Google begging and pleading them to. I would say that about as many enterprises use LibreOffice as Google Docs.

      Apple’s eaten their hardware lunch? OK fine … but Microsoft is a software company. Hardware is less important to Microsoft than software is to Apple. You do realize this, right?

      The bottom line is that Windows still has a 91% market share in laptop and desktop. Meanwhile, the Mac quarterly sales share has been dropping for the past few years, to the point where in 1Q 2017 – the last for which figures were available – about 4.2 million Macs were sold worldwide for a 6.8% share. That is only slightly hire than the market share of Chromebooks. Of course, Apple makes a much higher margin on their Macs than Acer, Asus, Samsung etc. make on Chromebooks, but that isn’t the point. Apple’s huge profits come from the iPhone and iPad. Microsoft still makes a ton of Windows, Office desktop and Office 365.

  3. I get down voted all the time for this, but I wish there was only one truck OS. When we hire new people, they all get glazed over when we tell them we are Mac based. OMG, not a Mac, oh how difficult. They are all so used to Windows and anything is different makes their head explode. So I say, Apple, buy MS, unify the world with one truck OS so I don’t have to listen to this people complain anymore about only understanding Windows and using a Mac is too difficult for them.

    1. For those familiar with Apple’s history, this is a twist on Michael Dell’s infamous taunt of Apple many years ago. With a small tweak, it works for the current situation:

      Shut Microsoft Down and Give The Money Back To The Shareholders

      1. And yet, Microsoft is still worth over half a Trillion dollars according to the market, and get a PE ratio double Apple’s because Apple is the slow grower. Funny huh?

        1. No, it is because right now Microsoft is losing money on Azure because the cost of building new cloud infrastructure is outstripping the revenue they are getting from Azure customers. Investors know that in 2-4 years Microsoft’s cloud infrastructure will be built out, which means the money that they will get from Azure will be pure profit. Especially since still more things are going to be moving to the cloud in the first place. Apps is one of them … read up on Google’s instant apps, and more will follow. Another thing is video gaming. Nvidia launched a Netflix for games type service a few years ago. Playstation is on the verge of launching theirs, and Microsoft will soon do the same for XBox. Nintendo will take awhile (they have less resources than Sony, Microsoft and even Nvidia) but they will have to in order to compete.

          Everyone is expecting the cloud to be the next big driver of revenue over the next 5-10 years, mostly enterprise but also consumer. The 3 big cloud companies are Amazon, Microsoft and Google. You know who is absent from that list?

          1. Apple
          2. Foreign competition (no Samsung, Sony, Nokia, Chinese companies etc.)

          THAT is why the stock prices of Amazon, Google and Microsoft are so high. But you guys are still fighting last decade’s battles over desktop PCs and mobile devices when the game is on the verge of shifting big time.

          Yes, I know, Apple is working on cloud stuff too. But that is mostly to support iCloud and other products to support people who buy iPhones and iPads. It is totally different from what Amazon, Microsoft and Google are working on in terms of sophistication and capability.

    2. I thought the Windows world simplistically, foolishly & ignorantly interpreted the macOS as being a “toy.” So I guess they can’t even figure out how to work that “toy.” Toys are much too complex for these doofuses.

    3. If there were only 1 truck OS, it would be Windows. You can live in your bubble all you want, but you fail to realize that Windows has a global market share of 91% of the laptop and desktop computer market. The remaining 9% is shared between macOS, Chrome OS and the various flavors of Linux. You can exclude Linux if you want but not Chrome OS … almost as many Chrome OS devices sell as Macs these days.

      While you guys keep proclaiming the death of Microsoft, you keep refusing to notice that Apple still never cracks 15% market share in any quarter, and some quarters drops below 10% share in terms of quarterly sales. 1st quarter 2017, Lenovo, HP, Dell and Asus sold more computers than Apple did, and Acer only trailed Apple by a little over 25,000 units. Even better: both Lenovo and HP sold 3 times as many computers as did Apple, and Dell sold more than twice as many. Apple’s market share: 6.8%. And that was actually higher YOY because 1Q 2016 it was only 6.3%, with barely 4 million computers sold.

      This is why Apple has all but given up on the Mac Mini, which is going on 3 years since its last update. This is also why Apple has pretty much given up on the MacBook Air, as only the 13 inch model is available and it hasn’t seen an update in 2 years. The Mac Mini and MacBook Air were cheaper Mac models aimed to lure switchers from Windows, which Apple was certain that first the iPod/iTunes and then certainly the iPhone/iPad would bring over. It turned out that Apple only got a (slight) bump in market share due to the failure of the unusable Windows 8. Since Windows 10 came out, the Mac market share has gone back from hovering at around 12% to consistently below 8%. The reason is that enterprises that had refused to buy new PCs during the Windows 8 era – and may have bought a few Macs during that time instead – are now buying Lenovos (who have IBM’s old corporate customers), HPs and Dells again. So now Apple is retooling by trying to get Windows consumers to shift to the iPad Pro … except that this isn’t really working either so long as the Microsoft Surface – and similar, cheaper devices from Lenovo, HP and Dell – give people a similar form factor with a full blown productivity/enterprise operating system and hardware instead of a mobile one running on ARM architecture.

      10 years from now, Windows will still be around, and fully integrated into the cloud infrastructure that Microsoft is building out and staking their future on. As both macOS and iOS are far behind Windows, Chrome OS and Android in cloud integration, we will see what the future holds for the 9% market share that Macs currently have. You can bet that Microsoft’s next play will be to promote using the high speed mobile and Internet speeds to shift the video, graphics and other “creative” stuff that Macs now specialize in from expensive local hardware to the cloud. Google tried that with their Chromebooks but failed, because no one in his right mind would use a Chromebook for work. I expect Microsoft to actually succeed.

  4. Wouldn’t it be sweet to positively identify one of the laid off Microsoft employees as one of the marchers in the iPhone “death parade”?

    I don’t, however, wish anyone bad luck- I suspect most of the laid off will look back in a few years and say “I didn’t know it at the time but that was the best thing that ever happened to me.”

  5. Of course, in calling Microsoft “beleagured” this guy fails to mention this:

    $23.6 billion in revenue last quarter
    $7.1 billion in operating income last quarter
    $5.7 billion in net income last quarter

    And this is with Microsoft spending a ton of money to build out cloud infrastructure, so much that right now their cloud business is actually losing money for them. (Unlike Amazon, who got into the cloud business in the first place because they had so much excess infrastructure sitting around unused but still had to pay for so they decided to monetize it.) But when they finish building out their cloud infrastructure, their profits are going to double.

    Microsoft laid off 3,000 sales people. They still have 71,000 employees! So this amounts to 4% of their workforce. Also … MICROSOFT IS HIRING LIKE CRAZY. They are hiring new engineers and programmers to build their next generation products. And they are also hiring new sales people to replace this crop of sales people that they are firing.

    That is right. If you actually drill down to these articles on the layoffs instead of celebrating from the headlines: Microsoft is firing the guys who specialized in selling Windows and Office licenses for desktop PCs for enterprise consumers. That business model is outdated and Microsoft knows it. Right now they are hiring sales people with a background in cloud technologies to sell Office 365, Azure and to convince companies to develop and deploy their corporate data and application solutions on Azure. Basically, if you have a background in software or servers and want to get into sales, Microsoft will hire you practically on the spot.

    So people, get this through your heads.

    1. Microsoft isn’t going anywhere
    2. Android isn’t going anywhere
    3. Google isn’t going anywhere
    4. Samsung isn’t going anywhere
    5. NONE OF THESE COMPANIES DIRECTLY COMPETE WITH APPLE so their success doesn’t have squat to do with Apple in the first place

    Case in point: Samsung sells 350 million smartphones a year, but 80% of those cost less than any iPhone. So please, people, give it a rest.

    1. you might want to reconsider your #4 point in light of the current Pyongyang Dough Boy up north…which will affect every company you mentioned.

  6. “Today, we are taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated”

    The more you try to dance around the statement and soft talk it, the more insensitive you sound. And the sad part is, more people are being laid off to pay for the PR flack that told them to say it that way.

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