2,100 Microsoft employees become jobless: Layoff runs deep and painful

20 September 2014, 8:56 am EDT By Nicole Arce Tech Times
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Microsoft has sent the pink slip to 2,100 more employees after laying off 13,000 workers earlier in July as part of new CEO Satya Nadella's vision of a leaner, meaner Microsoft.

The layoffs were expected since Microsoft announced that it was going to trim down its 125,000-strong workforce by 18,000 employees, majority of whom are former Nokia employees who were transferred over to Microsoft when the Windows Phone maker purchased Nokia for $7 billion. Microsoft says the layoffs will cost the company $1.6 billion in severance packages and related benefits for all affected employees and will incur $1.1 billion pre-tax charges.

Still, the cuts run deep and wide for many of the laid off workers, since the company said it was trimming down across the board in a variety of teams working on Microsoft projects. Microsoft, however, did not specify which teams were taking the cut.

The layoffs were first confirmed by Microsoft to ZDNet's Mary Jo Foley, who reported that 747 of the 2,100 getting the pink slip on Sept. 18 come from Microsoft's Seattle facility in Washington. Another 160 of those come from California, with around 50 or so composed of those working in the Microsoft Research Silicon Valley laboratory, which Microsoft Researcher Derek Murray says will be closing as part of a "consolidation of the west coast labs."

Microsoft has another 2,900 job cuts to make and it said the third leg of layoffs will most likely be finished by the end of this fiscal year, which is June next year. All in all, the company expects to let go of around 12,500 Nokia employees and another 5,500 Microsoft workers. Majority of the 18,000 employees Microsoft is laying off has already been let go in July when 13,000 were shed off by Microsoft as part of Nadella's bigger plan to change the company's organizational structure.

"We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making," says Nadella in an open memo sent to Microsoft employees in July. "This includes flattening organizations and increasing the span of control of people managers."

During the first round of layoffs, test engineers were said to have borne most of the brunt of the mass firing, according to Microsoft insiders cited by Business Insider. Nadella reportedly wants to break down the manager-developer-tester triad that is inherent in all Microsoft teams and roll back the testing into the developer team to eliminate bureaucracy and create better products faster.

Also affected were program managers. As the source notes, Microsoft had "too many program managers and too many managers of program managers."

Meanwhile, if there is one team safely cordoned off from the layoffs, it's the Windows unit, which is working on Threshold and believes that the next operating system to come out of Redmond will "solve all the problems with Windows 8."

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