More Layoffs by Microsoft (NASDAQ:MSFT)

A software developing firm the Microsoft Corporation (NASDAQ:MSFT) recently announced to fire around 2100 employees around the globe. Around 747 belonged to the Seattle area while the remaining were involved in the operations worldwide. Microsoft (NASDAQ:MSFT) has also decided to Shut down its Silicon Valley research lab which focused mainly on cloud computing and systems on a large scale.

In July, Microsoft (NASDAQ:MSFT) had announced its plan to reduce the overall workforce by 14% i.e. 18000 employees by the end of the next year. Microsoft (NASDAQ:MSFT) had a workforce greater than its market competitors i.e. Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) consisting of around 127,000 employees at that time. This was a strategic move by Microsoft (NASDAQ:MSFT) in order to consolidate its overall cost structure and to increase the profits.

Microsoft (NASDAQ:MSFT) had cut down the jobs in the first round of around 13,000 employees, who belonged to its recently acquired business Nokia (NYSE:NOK). Microsoft (NASDAQ:MSFT) aims to cut down the jobs of the rest of those 2,900 employees across the globe involved in various operations in the next 9 months.

Microsoft (NASDAQ:MSFT) has faced a great loss due to less demand of PCs in the market, as smartphones and tablets have gained dominance. So reducing the workforce will help the company in stabilizing and to compensate its loss.

However, severance packages have been offered by Microsoft (NASDAQ:MSFT) to the employees who have been laid off and because of these very packages, Microsoft (NASDAQ:MSFT) will have to face pre-tax charges in the coming four quarters of around $1.1 billion to $1.6 billion.

The realignment program is almost a part of Satya Nadella’s crucial plans, whose focus is to bring a change by eliminating the un-necessary management layers and aligning the new plans which will contribute towards the growth of the company. Due to the growth in the mobile technology, cloud-computing and productivity software, his aim is to focus on these areas to make the company run more profitably.

Nadella wrote in an email to the laid off employees that it was difficult to carry out this procedure, but it was necessary to drive the company in the new direction of technology. He further described that it was necessary to realign the workforce of the company to achieve the new goals.

Another spokeswoman for Microsoft (NASDAQ:MSFT) described in an email that layoffs happened in many business units around the globe but it was necessary to do so. They will continue to go through this process when necessary because the company comes first. She further said that they had great respect for the laid off employees who served for the PC world.

It is believed that most of the laid off employees belonged to its business partner Nokia (NYSE:NOK) as acquisitions always come with downsizing and laying off redundancies. The last time Microsoft (NASDAQ:MSFT) announced its plan to reduce the workforce was in 2009, when the company laid off around 5% of its overall workforce.