Microsoft plans more layoffs

Satya Nadella continues to reconfigure the new Microsoft, and specifically to root out the Nokia acquisition and other legacies left behind by former CEO, Steve Ballmer. The newest round of layoffs are coming as early as Wednesday, according to Nick Wingfield at the NY Times. These layoffs have been long anticipated, and confirmed by Nadella’s ‘touch choices’ email in June. At that time he finally pushed out Stephen Elop, the former Nokia head, and reorganized his senior team.
As I wrote at stoweboyd.com on 18 June (prior to the reboot at Gigaom Research, for the record),

Satya Nadella continues to consolidate Microsoft’s formerly fragmented organization, announcing in a company email that a number of executives – most notably Stephen Elop, the former CEO of Nokia – are leaving the company. Elop’s bad news, and it’s far overdue.
EVP Terry Myerson is getting a bump up to heir apparent, running a new Windows and Devices Group, a combination of the Microsoft Devices Group (which Elop was running) and the Operating Systems Group (which Myerson headed). This group controls Windows, Xbox, Lumia, Surface, and Hololens.
EVP Scott Guthrie is accumulating the Microsoft Dynamics Group – which was running in a standalone fashion under Kirill Tatarinov– underneath the Cloud and Enterprise team. Alex Wilhelm thinks the Dynamics team is being fragmented into various of Guthrie’s groups.
EVP Qi Lu of the Applications and Service Group is being handed the company’s education activities that Eric Rudder (bye bye) was running.
Mark Penn, one of Ballmer’s favorites is out of his strategy role. Penn is starting an equity fund with Ballmer’s support.
So with these changes, the senior leadership has twelve execs:

  • Satya Nadella, Chief Executive Officer
  • Chris Capossela, Executive Vice President and Chief Marketing Officer
  • Kurt DelBene, Executive Vice President, Corporate Strategy and Planning
  • Scott Guthrie, Executive Vice President, Cloud and Enterprise
  • Amy Hood, Executive Vice President and Chief Financial Officer
  • Kathleen Hogan, Executive Vice President, Human Resources
  • Peggy Johnson, Executive Vice President, Business Development
  • Qi Lu, Executive Vice President, Applications and Services Group
  • Terry Myerson, Executive Vice President, Windows and Devices Group
  • Harry Shum, Executive Vice President, Technology and Research
  • Brad Smith, Executive Vice President and General Counsel, Legal and Corporate Affairs
  • Kevin Turner, Chief Operating Officer

Notice that with departures of a bunch of men, the female leadership is now 25%, which I bet is a high for the company.

Maybe Microsoft should sell back the smartphone division to Nokia, which has announced plans to start up cell phone production, again.


Update: 9:56am 2015-07-08
Microsoft has announced the cuts: 7,800, mostly in the phone business, and a write down of $7.6 billion linked to the acquisition of Nokia Devices and Services business.

IBM bristles at report of massive layoffs to come

Oy. what a week IBM has had. And it’s only Monday.

Last week, a report surfaced that the IT giant would soon cut a whopping 26 percent of its workforce — or about 118,000 employees — as part of a “Reorg from Hell.”  The story was later picked up by the universe.

Company insiders and former employees who are still close to [company]IBM[/company] have told me they expect big layoffs this quarter. Just before IBM’s fourth quarter earnings call, one insider said if the numbers were bad, IBM would start instituting massive “HP-style” layoffs. The numbers were not as bad as feared, but then it’s all relative.

If the 26 percent layoffs do happen, Sanford Bernstein analyst Toni Sacconaghi noted in a research note that they would “dwarf anything that IBM has done historically since its massive reorganization under [CEO] Lou Gerstner in 1990.” At that time IBM nixed about 60,000 people or 20 percent of its workforce.

Over the last few years, IBM has been nipping and tucking to streamline itself and get costs in line. It’s done things like offering to retrain some employees  in cloud and mobile expertise if they agreed to salary cuts, for example.

So this 26 percent figure is an eye-popping number, one so shocking that IBM took the unusual step of elaborating on its usual official non-comment to say via email (emphasis mine):

IBM does not comment on rumors, even ridiculous or baseless ones. If anyone had checked information readily available from our public earnings statements, or had simply asked us, they would know that IBM has already announced the company has just taken a $600 million charge for workforce rebalancing. This equates to several thousand people, a mere fraction of what’s been reported.

The spokesman added that the company hired 45,000 people last year and now has 15,000 open jobs posted worldwide “for new skills in growth areas such as cloud, analytics, security, and social and mobile technologies.”

Subsequent reports — including one from TechCrunch — dialed back the numbers by about 10x, but didn’t challenge the overall premise that layoffs loom.

This is probably a case where the truth lies somewhere in the middle. The fact that IBM is hiring for hot new skillsets does not mean it will not also wield an ax in other areas.

Yes, newsrooms are shrinking — but journalism is growing

Layoffs at newspapers like the New York Times are no longer a surprise. But we should be careful not to assume that just because some papers are downsizing, journalism as a whole is in decline — because it’s growing faster than ever

Still struggling, Fab will cut 80-90 employees tomorrow

It seems that hard times are continuing for struggling e-commerce startup Fab, as a company spokesperson confirmed to Buzzfeed today that it will lay of 80 to 90 employees — roughly a third of its current staff — in meetings tomorrow. The news comes as the team has spent the last six months putting together a line of sofas, which launched on Tuesday, in an effort to pivot from flash deals. The past year hasn’t been the greatest for Fab: Once worth roughly $1 billion to investors, the company shed 200 employees over two different layoffs in 2013 and also lost cofounder Bradford Shellhammer.

IBM job cuts continue, now in the US

The layoffs that started in India and Europe are now coming stateside. IBM admits to rebalancing its workforce but won’t confirm numbers or units affected.

Music startup Topspin hit with significant layoffs

Los Angeles-based music marketing and merchandise sales startup Topspin Media laid of a significant number of its staff Wednesday. Music blog hypebot first reported the news, calling it “major layoffs,” and laid off employees said on Twitter that “half“or even “the majority” of the company’s staff was let go. Topspin acknowledged that there have been layoffs when contacted by Gigaom, but declined to comment further on the matter. The company recently teamed up with Spotify to offer artists a way to directly sell merchandise through its service, and it is also slated to power a similar integration for the recently-launched Beats Music service.

Sprint to cut workforce across the ranks

In an SEC filing, Sprint(s s) said it has begun implementing a plan to reduce its workforce over the next five months. The carrier didn’t say how many jobs it would cut, only that they would be across managerial and non-managerial staff and that it would incur severance and restructuring costs around $165 million in its fourth quarter earnings. It’s been six months since Sprint and SoftBank closed their massive investment deal, but Sprint is continuing to struggle.