Changes -- And Possibly Layoffs -- Are Coming For Microsoft Employees

Satya Nadella Microsoft CEOScreenshotMicrosoft CEO Satya Nadella

Mixed into a long memo sent by Microsoft CEO Satya Nadella to his employees was new information about changes to its workforce.

For one thing, he wants to measure everything and everyone by a new standard: data.

Nadella is creating something he calls “Data and Applied Science” for every product team. The purpose is “measurable outcomes for our products and predictive analysis of market trends.”

He didn’t clarify, but it sounds a lot like what companies like Facebook and Amazon do. They don’t guess at new projects and features. They test them, gather data, and make decisions from that.

It also sounds as if he’s working on a new employee review processes. Former CEO Steve Ballmer ended Microsoft’s controversial stack-rank system late last year, a system that pitted employees against each other. Now employees are waiting to hear how their new CEO will judge them in the coming year and beyond.

Again, no details but definite hints that something is in the works. He wrote, “You will see fewer people get involved in decisions and more emphasis on accountability. … We will increase the fluidity of information and ideas by taking actions to flatten the organisation and develop leaner business processes. Culture change means we will do things differently. Often people think that means everyone other than them.”

Although Nadella is new to the CEO role, remember that he’s a longtime Microsoft executive who’s been with the company since 1992. Internally, he’s known as the guy who gets rid of middle management from the units that he’s run.

Underneath it all, employees are waiting on information about layoffs from the acquisition of Nokia. There was some subtle language in the memo that news would come soon.

He wrote, “On July 22, we’ll announce our earnings results for the past quarter and I’ll say more then on what we are doing in FY15 to focus on our core. Over the course of July, the Senior Leadership Team and I will share more on the engineering and organisation changes we believe are needed.”

Employees won’t be surprised to hear about layoffs if they do happen.

Microsoft’s new fiscal year just began on July 1 and a few months earlier, at the end of April, Microsoft closed its mega $US7.2 billion acquisition of Nokia, adding about 25,000 employees to the roster. Large deals like that almost always involve employee cuts, and there have been a variety of hints since the merger was first announced that Microsoft would be making cuts with this one, too.

For instance, when Microsoft agreed to buy Nokia’s handset business in September, it said it would find $600 million in annual cost savings within 18 months after the deal closes.

Sources just told Bloomberg’s Dina Bass that trimming $US600 million will likely involve trimming jobs in areas where the two companies overlap.

In fact, when Ballmer announced the deal, he identified a number of job roles at the company that would need to “integrate.” These included finance, legal, HR, PR, customer support, business development, purchasing, and IT.

So changes are definitely coming, and everyone is waiting to hear details, hopefully later this month.

We reached out to Microsoft to request comment. Microsoft has previously declined comment on upcoming changes to its workforce.

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