The Cut

Last week Microsoft proved the rumors true and announced cuts to its job force. In a series of emails across divisions the software company announced 18,000 would be laid off. While most of the news was about cuts to the recently acquired Nokia hardware division; there were also cuts to other divisions.

In the Operating Systems Group cuts were made to testing, and over in Xbox the biggest news was the closure of Xbox Entertainment Studios (which was to make original content for the Xbox). Microsoft also made cuts in its contract workforce and sales divisions.

These cuts also coincide with restructuring of a number groups within the company. In the OSG, testing is being integrated into regular software development . In the hardware group, Nokia assets are being integrated. And even Sales is being streamlined to split itself between business, consumer, and its channel partners.

All this has been well received by Wall Street. And many commentators have said the cuts were a long time coming, but it has to be hard for those let go. And then there is the fanboy reaction.

Any cuts (especially around Nokia and Xbox) were going to cause consternation amongst the faithful. I have to admit that like some a part of me looks at the cuts as a sign that Satya Nadella’s Microsoft is all but done with the consumer market. The layoff has seen a reduction in manufacturing on Nokia’s side

And the closing of Xbox studios feels like a short term strategy. I know Phil Spencer and his team are working on gaining back hardcore gamer trust, but I think it should not come at the expense of possible. I know a lot of people will be sore about cuts to Nokia hardware, but I think it will be positive over time. The key thing there is the focus on integrating this new hardware group into Microsoft.

At the end of the day a mass firing like this will not be easy on anyone. As a fan I want Microsoft to concentrate on products and not wasting anybody. As someone watching a technology company I understand that the reality facing Microsoft will make require a restructuring to account for changes in the computer landscape. Microsoft is on a journey into the future; walking backwards.

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