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Nadella dodges questions about future Microsoft layoffs in new interviews

satya nadella

Microsoft CEO Satya Nadella conducted a series of short interviews with several media outlets Thursday, but would not answer questions about possible future layoffs at the company in the wake of its acquisition of Nokia's smartphone division.

The interviews were conducted by phone a few hours after Microsoft released an email from Nadella that was sent to all of the company's employees Thursday morning. Nadella used the 3,105 word email to talk about his "mobile first-cloud first" vision for Microsoft but hinted that major organizational changes are in the works at the company as well.

Usually, "organizational changes" are code words for "layoffs" but during his interviews on Thursday, Nadella dodged those questions when asked by the media. When The Wall Street Journal asked Nadella if Microsoft will have fewer employees by the end of 2014 that it currently does, he replied, "I'm not going to go there today."

Microsoft added about 25,000 new employees when it acquired Nokia's Devices and Services division in late April, and many analysts have predicted that situation will force Microsoft into making cuts in its workforce soon. Nadella has already said that more information about Microsoft's future will be revealed on July 22, when the company issues its latest quarterly financial results.

In a chat with The Verge, Nadella spoke specifically on Windows Phone and how the company knows it needs to do better to increase its market share. He stated:

We're going to change it by producing phones — where we grow in countries where we've grown from 3 to 10 percent, celebrate that. And then have higher ambition. There are many countries, even in Western Europe, where we have over 10 percent share, and I completely recognize that if you are not growing in the US, for you we are nothing, and I'm grounded in that reality. But at the same time, [we will] keep coming at it and keep coming at it, but have a core which you really are using to differentiate what your value proposition for the user is.

What do you think about Nadella's vision for Microsoft and do you think the company needs to make some changes, including laying off part of its workforce?

Source: Wall Street Journal; The Verge

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Nadella dodges questions about future Microsoft layoffs in new interviews

144 Comments

+1

When you've got shareholders to answer to, layoffs are inevitable with the aquisition of another company. 

I think this does not just happen when you have shareholders. If you accquire a new company you will most likely Always have a lot of redundancies that you need to sort out. Stakeholders or not

Indeed as generally you have an overlap in roles and functions. It wouldn't be efficient let alone cost effective to carry on with duplication. I just hope they keep the marketing team and engineering / design team from Nokia intact.

Shareholders care about the profitability of the company, because profits for the company generally translates to profits for the shareholder. If the aquisition causes a bunch of redundancy in the company, that is going to hurt the bottom line. Layoffs decrease expenditures. Lets just hope they trim the fat and not the muscle.

Because having more employees than necessary means spending more money on wages etc which reduces profitability. And the less profits a company has, the less its shareholders receive when the time comes for the company to pass the earnings to them.

You need to deliver shareholder value.

1. you fire people to save money so shareholders get money

2. you have the extra people move into new projects (r&d) etc and deliver more value so microsoft's profits rise as they compete with google on self driving cars etc

3. get rid of the employees that arent contributing. Every workplace has employees that dont carry their weight and bring the company down (emotionally too). if you can safely identify them, give them the boot. that ultimately delivers value to the shareholders as well (either through a more efficient company or better competing company)

Employee churn is important to keep fresh talent & ideas / prevent stagnation.

Employee churn is also "important" as you need to spend time training the new employees and you end up with a whole lot of employees that have no institutional memory of what the organization has done or attempted.   So no, continually turning over new employees is NOT ideal.

shareholders are the owners of a company. if you are an owner, do you want to spend money on things that are not need for the operation of a company? Over time, companies become inefficient and management needs to re-evaluate where the waste lies. when two companies merge, you always get extra employees with redundant functions.

Well there's a lot of bureaucracy at Microsoft. Too many levels in the organization and he spoke about flattening the structure to speed up innovation. It's often the case where the left hand doesn't know what the right is doing in a company that large. This is the main reason there isn't enough cohesiveness across all of Microsoft's products.

By streamlining processes, making it easier to get from idea to product and having products integrate better with each other will ultimately result in a better Microsoft. This doesn't just mean getting rid of some organizational fat, but also moving people to more appropriate roles and skilling up some people.

On the one hand I feel as though Microsoft shouldn't try to be all things to all people, but having said that I do like their universal approach to technology. I for one have recently installed Windows 8.1 on my MacBook Pro and I'm moving from an iPhone to a Windows Phone. I believe in the future of Microsoft and I really love what they're doing now.

With all of these changes, I just hope that we'll have shorter waits for product updates. Smaller, more polished updates is what they should be aiming for.

Honestly, Satya hasn't orchestrated anything of his own yet as this is simply a continuation of Ballmer's one Microsoft vision s he spoke about s more stream lined process, fewer obstacles in the process of getting thing to market, more research, etc. So while the media wants to give Satya all of the credit, go back and listen to our read some of the thing Ballmer said prior to his departure in regards to one Microsoft, future products, the purchase of Nokia's devices & services division,etc. Now what Satya has done is put other platforms before WP and he will be helping his managers determine who will be laid-off. Threshold and Cortana was already being produced prior to Satya's appointment, so honestly, his contribution this round will only be in speed to market, determining the final product that goes to market, what employees will continue working at Microsoft, and of course brokering deals with developers, OEMs, etc. We will see pure Satya with the next major release of windows after threshold.... That will be pure Satya, until then, it's Ballmer with a sprinkle of Satya on top!

Satya is a engineer while Ballmer is a marketing guy.  Satya is much more clear and focused in terms of MS future direction.  He hits the core of things.  Obviously, he has to make compromises with the past somewhat, but the changes are coming fast.  The MS employees would have to tighten their seat belts from now on.

The focus he executing are things and motions put in place by Ballmer. Please explain exactly what Satya has done! Office for iPad / Android, threshold, windows 8,8.1, partnerships with hardware and OEMs, staff streamlining, productivity cycles/OS cycle speed efficiency, all part of Ballmer's plan; so again explain to me what exactly outside of azure has Satya done independently besides carry out plans put in place by Ballmer. I don't think we will see anything pure Satya until after threshold is released. From that point forward, it's all Satya.

It's hard to find passion in words like"value proposition". He should stop saying things like that.

Hard for who?

He's a CEO stirring up competitiveness amongst his employees. People can be very passionate with the determination to keep a job they enjoy. Classic move.

Haven't they spend more than enough time for selling their "core" theory. I am not buying this theory again if Windows Phone 9 is a story of "better core". Sadly, it looks like another update will again be updating the core and background beast that end user doesn't really see. Microsoft has to entice end users with GDRs if its main OS updates are going to be for geeks and IT masters. Core, core, core - sounds like my personal trainer. 

No.. The core of WP isn't going to change, even when they merge it with RT, because they both already share the same core.. That's done, and WP will now remain on this platform for years to come... WP9 will be just another version of WP8... All current apps should be able to run fine on both WP8, and RT, just as they do today...... The point of merging WP, and RT, even further is to make those apps between the two platforms even more universal...
..................
So, while everyone is wondering what's going to happen when they merge the two I say just look because it's already really happened.... That was the whole point of moving from WP7's core to W8,,,, so that these changes could take place without changing kernels every damn time.... We should all be aware of this by now.

Very well said. The Universal Apps are able to run on WP ánd Win 8/RT. However, I think they will release a tablet version of Windows Phone, running all the WP apps with just a UI change (just like iPhone apps run on an iPad but better with an actual tablet UI and resolution). That would make sense, and the traditional desktop will then dissappear on tablets, which will then be replaced by a Modern UI Explorer 'app'.

I just hope they will make it available for my Surface RT too :) Imagine what the performance gain can be when the lean and light WP kernel runs on it :-P

Well, maybe this is just all wishful thinking :-)

So, if the core exists its better leading edge devices next. Surface is doing well so the WP, need to do better, possibly.

Your trainer is smart. Training your core is the smartest thing to do. It allows you to be stronger peripherally.

No, fire the people who are thinking about giving away Microsoft services to other platforms and are taking away more and more reasons to buy Windows Phones.

Completely agree... First, keep growing WP leveraging MS exclusive services. Provided you have a solid marketshare, squeeze those Crapdroid and iOS guys :P

Elop didn't create windows 8-8.1, RT, surface, but he did orchestrate the deal between Microsoft and Nokia... Can anybody tell me which windows phone put WP on the map? Answer: Nokia Lumia series and again who orchestrated that deal again??

It did kinda sound like he was giving up on the US, but he just has a funny way of wording things, which is something that MS needs to work with him on... Nevertheless, I think (I think) he means the complete opposite of what it sounds like he's saying... Hence my comment below⬇⬇⬇⬇

So, Nadella is saying that he realizes that many think if your market share in the U.S. is small then you'll still be seen as irrelevant even if it is larger in other countries.....
...........
This I can agree with..

Finally confirmation that they are aware that they have a larger market outside the US. Hopefully now we can see more effort being pumped out globally and only then we would get increased mindshare amongst the developers of popular apps and games, who still insist that the wp market share is to small to be worthwhile. Also really hoping all Bing US features / equivalents get rolled out globally.

Agreed, but I can honestly say more people in the US have become interested in WP as some of the most die hard Apple guys have jumped over to WP since I installed 8.1 beta on their work phones I distributed. Even yesterday, they said they're getting their kids the 630 from cricket for them, who right now is giving it away free after mail in rebate

Nice point. By the way, I've never learnt that being succesful in entry-level products is a bad way to be eventually successful in the whole market. I'm the proud owner ;) of both a 520 and a 925, and I'm sure that they are the best of two different 'worlds',

Lumia 520 is the first entry-level smartphone that works for me. And, when most people in this planet is not willing to pay $400 for a gadget that works (and that's just happening with Android), this points a path to success.

Buying Nokia and Buying Nokia's Devices and Services Division do not mean the same thing.

I really wish Rich would correct his title of that old article. The current title is incorrect and cringe worthy as Microsoft has not acquired Nokia. Writers linking to an incorrectly titled article makes things even worse as some people actually believe that Microsoft acquired/bought Nokia and that isn't true.

Can to guys please stop crying over Nokia as you know he means purchased the devises& services division.

Who is crying over Nokia? Don't be arrogant and think you know what other people know. It is stupid for someone to defend "what he means" and equally dumb that a reader should have to figure out what someone means. A writer has a responsibility to write factual, accurate representations of factual events.

Stating Microsoft acquired/bought Nokia is not factual or actual.

There is a saying "mean what you say and say what you mean" and that is not what is happening here.

It is selfish of you and anyone else to think that everyone knows what you know INSTEAD of encouraging the writer to write accurately so that readers won't have to "know what he means".

What we read is what is meant. Acquiring Nokia and Acquiring Nokia's Devices and Services division does not mean the same thing.

The writer should have written what he meant instead of writing something wrong and leaving up to the interpretation of readers as to what he meant.

Come on, this is basic communications 101. I am amazed that some readers defend misleading information. Just because you and I know does not mean someone else isn't mislead by the false information.

It is better to correct the information and prevent any possible misunderstandings.

Some of you are so selfish you only care that you know what the writer meant. Sigh...

If you're an avid follower of this site, you should know by now that Microsoft purchased the devices and services division of Nokia as this site had stayed out clearly on numerous occasions. If you don't read articles in full then maybe your should try. I'm not defending anyone, just stating facts that again have been posted on this site numerous times.

Everyone is not an avid follower of this site and writers know that.

A writer is supposed to write accurate information as they don't know if it is a readers first time hearing the news. If misleading information is published, an unknowing reader may leave the site thinking it is true, when it is not.

The duty is on the writer as we don't know what the reader knows prior to reading our articles.

I agree with what you said, that does not change the fact that when articles or sentences are not correct, it is better to correct them instead of leaving it up to the reader to know what the writer means.

You spoke of avid readers knowing, what do you say about non avid readers who come across an article that states false information? Are they supposed to just believe what they read for the first time?

Yeah, I'm starting to notice that the Topolsky doucheyness is starting to rub off on Tom.  I guess it was a matter of time before he became assimilated.

Agreed, I think the verges core is growing on Tom as he's not the same person he was when he ran winrumors

PR relations are important.

It takes guts to sit across from the people that are ridiculing and mocking you and say "hey we're going to change the perception you have of us"

now he just has to deliver on that - he's raised the stakes (taken a risk) and should he deliver the reward will be higher too

Funnily enough, Tom Warren didn't even interview Nadella. It was Joshua Topolsky, who asked the same old negative question in regards to Microsoft. But guess what? Yep, Nadella schooled his ar*e in that interview -- Nadella is a very intelligent man, as too was Ballmer.

However, if Ballmer was still at Microsoft, more than likely he would have bitten Topolsky's head off! Whereas, Nadella ripped his head off with eloquence -- respect. So yeah, I think it was a good thing by them facing the haters head-on ;-)

I wouldn't say they were "the same old negative questions." They were honest questions about how MS plans to become relevant with consumers, because so far they really haven't. Topolsky ignored their enterprise strengths because it wasn't relevant to this readers. Keep on piling the hate onto The Verge all you want (I agree they sometimes seen to ignore the stuff MS is doing well), but don't be blind to the fact that maybe those questions seemed "negative" because a large part of the buying public has a negative perception of MS and they really do need to fix that.

Here mate let me clear a few things up for you:

1) I'm not a Microsoft fanboy.

2) I ain't piling no hate on the Verge, just simple observations mate.

3) If it was any other site -- who don't write one sided stories -- that wrote the original article, I 'would' understand your point. However, like you said "I agree they sometimes seen to ignore the stuff MS is doing well". Well I'm sorry mate I think you are wrong, as they always write negative things. Even on the rare occasion, they have seemed to write on the positives MS do, they most times start or end with something to do with Google or Apple. Furthermore, it is also a well known 'fact' that when people are reading something, the only thing that sticks in their mind is the 'beginning and 'end'. So even if it seems to you, they write good articles they in fact don't because all the juicy positive information is lost in the middle. Therefore, to me they write awful articles, which clearly has hidden agendas!

Finally, a good story -- in my opinion -- has to be balanced, which the Verge doesn't do. So the question you should ask yourself, is why mate?

Of course CEOs have to say something to calm down the owners. He cant say that there is no light at the end of the tunnel and your millions have vanished to the air.

Finns should be aware. First actions will be aimed to ex-nokia workers in Finland.

And there is no "many" western-country, where WP have abaut 10% marketshare. There is only two of them. French and Finland.

Posted via Windows Phone Central App

Good point, monton1999. By the way, in my country (Spain) I've never-never seen a TV advertising Nokia phones in the last years. Maybe I missed them, but my workmates' reaction at my Lumia was rather eloquent: 'Is nokia making phones...yet?'

So, I'm quite pessimistic about the news we are being given on July 22nd... Until then I can't keep recommending WP... No one likes to swallow his own words

Microsoft just need to focus more on the OS and keep producing better and better devices. Nothing more. The success and the better market share are close, closer than the current numbers shows.

Just keep working!

You forgot one more very crucial thing that MS must do...
................
MARKETING❗❗❗❗❗❗❗❗❗❗❗❗❗❗❗❗

They've been sponsoring half time shows in various American leagues. Should have had World Cup. Billions of viewers, but....

No targeted advertising. Just a logo.

Yeah Samsung does as outlined in their quarterly report recently addressed where they stated that they ramped up advertising and offered deals like buy one galaxy get one free in an effort to combat slow sales

In my country (Spain) I've never-never seen a TV advertising Nokia phones in the last years. Maybe I missed them, but my workmates' reaction at my Lumia was rather eloquent: 'Is nokia making phones...yet?'

So, I'm quite pessimistic about the news we are being given on July 22nd... :(

New CEO. Layoffs will happen especially in areas of redundancy. Engineers and tech people will be moved to other projects. These layoffs will probably be the "support" kind (payroll, secretarial, etc) where the purchase of Nokia brought in more people than they need.

Super Satya !!!
First run this query in old Nokia mail server : "select employee from sent_emails where body like '%sent from my iPhone' or %sent from my ipad'" and start cleaning from there ;)

No...I don't want to see massive layoffs amongst the hourly staff...they don't deserve to loose their positions...they can close unoccupied slots,and force top management to have their pay/bonuses reflect their actual worth.
Why should a hourly worker get a pink slip,while the higher ups get pay increases/bonuses/stock increases as they always do?
As what has been openly discussed by ex-executives in the press,those in management positions that have sabotaged or purposely delayed work to hurt WP or any other project should be terminated immediately...this should be enough incentive to satisfy the needed layoffs and truly motivate the rest.

Unfortunately its those management positions that often hold the keys and will aways wrangle to find a scapegoat. I agree the hourly staff shouldn't be penalised but sadly they are the usually the ones that get penalised the most during these "organizational changes", I imagine it will be the HR and Accounting departments that will get "streamlined" first.

I have questions for you, where's Ballmer, Synosky, Allard, Bates, etc? Thus far the layoffs have all been management and not worker bees. It will be a combination this time around and it should be.

He said they had to do better with Wp, I hope he doesn't forget that they need to be faster too. Let's face it, they need to speed up the development; 8.1 is amazing but it took so long to release it that now it's gonna be hard to catch up with the competition.

A company the size of MS will always be shedding staff at some point. Unfortunately it's inevitable (I've been in big companies that go through org changes and redundancies - it's horrid). It's just not good business running multiple teams and roles that could be consolidated. The nature of the beast...

So true...
If they want to increase their market share they need to first launch all the updates :/
Come on we lack features like making a folder.. A very basic feature!
Been ages that features' been there.
Symbian had it too.
Also we need a brightness slider.
They are all so basic wondering why they cant work on this stuff first.

You'd kind of think if they were trying to trim fat and streamline they might have reconsidered that $33 million in "severance" they handed Elop when all he was really doing was essentially making a lateral move into another high paying executive position. I'm willing to bet the ground level employees who actually get let go during this merger won't get 1/1,000th the same consideration.

Just sayin'.

Be that as it may, when Microsoft acquired the devices division didn't it become their money? Technically, Elop was never "released", just transferred. And having said that, his contract was made with Nokia so would Microsoft have been obligated to honor it? Regardless it still stinks to high heaven since he wasn't really losing anything.

I like what he said about a flatter organization. MSFT is too top heavy with too many managers who need to be axed out. Let the developers run it and it will become more like google able to ship on time.

BTW I'm hoping that this re-org will finally hold Joe B and Terry M accountable for the windows phone disaster. They should be demoted to running a product that isn't key or needs to ship fast. Personally I think putting them in charge of MS access is about all they deserve.

"Let the developers run it and it will become more like Google able to ship as perpetual beta."

There, I fixed it for ya. ;)

"..where we grow.."? You didn't do anything, Nokia had that market influence and would've pushed anything they wanted to. I feel like it's important that MS knew this because they would be really disappointed once they found out they carry no brand reputation when they drop Nokia name.

I think the problem with Windows Phone is actually its value proposition. Beyond the hardcore, Joe/Jill Phone Buyer has no idea WHY he/she would even want Windows Phone.

That's a pretty huge problem, even more so now, with the WP platform, especially since Office 365 is available on iOS and confirmed that it's coming to Android tablets.

Once Microsoft services are as good, or better (Skype), on other platforms, what's the selling point for Windows Phone?  It sure isn't the terrible music-media experience.   Yeah, I'm looking at YOU, Xbox Music and Video.

This it's why I honestly believe at some point Microsoft should have many more retail chains of their own selling theirs and OEM products. Leave the best buy's and Fry's of the world to sell TVs, appliances, stereo equipment, etc and how long will they last. Does anyone here remember circuit city??? I honestly think there was a cryptic message in Satya's email that also points to this when he stated they will manufacture products to generate interest and set the bar whenever necessary..... He knows that time is now! Also, I don't think many if any of the newly acquired Nokia employees have to worry, it's the employees at Microsoft who have been they're 7-20 who got comfortable, stopped being creative and settled for collecting a fast check! The new philosophy is, "you're going to earn your check like you did in the early days"! If you don't due to skill set or laziness, hit the door!

Instead of worrying about layoffs....why don't you worry about putting Microsoft customers ahead of your competition customers? This guy is wearing thin already, and he just got here.

Yeah, there's what they say, the corporate drone-Dilbert speak, and there's what they *do*.

Hint: watch what they do, not what they say.

Hopefully this guy will take pride on its products, stop giving away what is exclusive with msftf,Xbox,one note,office, shoot why would you think people not buying windowsphone if al they do is share all the good stuff

They're not technically "giving away" anything. Its all about bringing new users onto their profitable properties (of which Windows Phone is not yet one) and keeping them their regardless of platform. It's not personal and it's why companies exist - to make money, not make you happy.

He's about openness and the cloud so he will give away almost everything cause Google does. If you can't beat' em, join'em.... After all, we do manufacture Android phones already

No, Microsoft did not acquire Nokia.

Microsoft bought the Devices and Services division from Nokia. Nokia is still a separate company from Microsoft, just without the old Devices and Services division.

Nokia is not owned by Microsoft. Nokia has always been a single company with many divisions and so any reports of Microsoft acquiring or buying Nokia are false and misleading.

Microsoft purchased the Devices and Services from Nokia and has now renamed Devices and Services to Microsoft Mobile Oy (or simply Microsoft Mobile as in the Windows Phone Store).

Windows Phone Central has a history of misrepresenting the end result of the Microsoft and Nokia transaction through incorrect and misleading headlines, titles, links and articles. Not every writer has done this. Daniel Rubino stated in a recent comments section, helping to clarify, that Microsoft does not own Nokia and that Nokia is a separate company.

I hope that the various writers correct their articles because there should not be any confusion as to what has occurred between Microsoft and Nokia and stating that Microsoft bought or acquired Nokia is a lie, simple as that and it should not be up to the readers to "know what the writer means". The writer shoudl write what he or she means and their writing should accuractly represent the facts.

No. Nokia sold Devices and Services to Microsoft and D&S is no longer a part of Nokia. Microsoft does not own any of Nokia as Nokia is a separate company that operates on its own.

Now, if Microsoft invested in Nokia, bought shares of Nokia or bought a controlling stake in Nokia or actually bought Nokia, then and only then would Microsoft own a part of Nokia or own Nokia.

Devices and Services does not belong to Nokia anymore, they were sold. Those employees no longer work for Nokia and as such, Microsoft doesn't own any of Nokia.

Hopefully they layoff all the crappy people (ie Xbox Music dev team) and hire some real talent to get their services on par with the rest of their US competition... 

I happen to think this team is doing great job. It's by far my fav music app. In fact it seems with recent acquisitions quite likely Apple and Google are going to try and replicate what Xbox Music is doing with purchase, radio, and cross device streaming all in one app.

Either you work on the Xbox Music team (in which case please do a better job) or you have never used the app. I STILL, after ALL these updates, get a black screen over 50% of the time when I try and open the app... WTF... No one is trying to replicate what MS is doing with Xbox Music - they're already lightyears ahead. For starters their apps actually open and play music.

 

MS is failing miserably and I sincerely hope they layoff all of the wasted resources (crappy people) and bring in some real talent to get their act together. MS is playing catch up in nearly every arena - not the other way around.

What exactly did you expect? "You know, we're haven't announced anything about layoffs, but let me tell you about then now in this interview"

Definatly don't think they should get rid of any of the talented engineers software and hardware that have made the Nokia phones as awesome as they are today!

I remember when WP8 was announced at Build and they touted all the wonderful integration with MS services, a big one being Skype. Here we are, several years later and on to WP8.1 and still Skype crashes constantly. Why can't they figure out how to build an app for their own OS? Skype blows big fat donkey balls. Xbox Music blows big fat donkey balls. MS sucks at this... I can't believe I'm still around on this OS... They have until the new hardware comes out in November - by that time they need to have their own apps running smoothly on their own OS. Simple as that. There is no excuse for this BS.