Microsoft has prepared the ground for life in a challenging future with the announcement of job cuts, a phasing out of its four month old Nokia X line, and a new cloud partnership with Cisco, as part of a wider push to rebrand and restructure the firm’s offering.
These recent developments mark the biggest evolution in the tech giant’s 39-year history, and come almost half a year into Satya Nadella’s role as Microsoft’s CEO who had promised to implement a “leaner” and more “ambitious” business strategy over his tenure.
Planning to cut around 14% of his company’s workforce, Nadella noted in a memo to staff last week that 18,000 positions would be cut in the coming year. The layoffs will primarily affect staff working for the firm’s phone and tablet business, as the company seeks to integrate its newly-acquired Nokia business, bought in April this year for $7.2bn.
Following the announcement of these projected job losses, Microsoft’s shares reached their highest point since the 2000 boom, advancing 1.5% to $44.84.
A further reported cut to the firm’s portfolio was the Nokia X Android series, which launched this February. In an email to employees on Thursday, Stephen Elop, Microsoft’s head of mobile devices, wrote in response to this planned phasing out of the Android smartphones: “We plan to drive Windows Phone volume by targeting the more affordable smartphone segments, which are the fastest-growing segments of the market, with Lumia.”
Additional plans for Microsoft’s future agenda were revealed at WPC 2014, its Worldwide Partner Conference, last week, including a multi-year partnership with Cisco. This new alliance will look to develop cloud solutions for enterprise. Specifically, Cisco has agreed to migrate Windows 2003 users to Windows 2012 R2 on the Cisco UCS platform – a pact which will eventually see Microsoft supply its software and Cisco supply its “revenue-leading” hardware.
Commenting on the new CEO’s vision, Reuters suggested “the […] move is designed to help Microsoft shift from being a primarily software-focused company to one that sells online services, apps and devices that it hopes will make people and businesses more productive.
“Nadella needs to make Microsoft a stronger competitor to Google and Apple, which have dominated the new era of mobile-centric computing.”
Confirming a shift in direction for the business, Nadella last week outlined his plans to market a rebranded Microsoft as “the productivity and platform company for the mobile-first and cloud-first world.”