Latest round of job cuts builds on 1,850 layoffs Microsoft announced in May
Continuing to tighten its belt, Microsoft plans to get rid of some 2,850 employees this year, according to a new filing with the U.S. Securities and Exchange Commission.
This is an expansion of a job-cutting plan announced in May that started with 1,850 layoffs. In the fiscal year that ended June 30, the software giant cut more than 7,000 employees, Business Insider reports.
According to the SEC documentation, “In addition to the elimination of 1,850 positions that were announced in May 2016, approximately 2,850 roles globally will be reduced during the year as an extension of the earlier plan, and these actions are expected to be completed by the end of fiscal year 2017.”
Many of the recent layoffs are related to Microsoft’s long-struggling smartphone business, which it acquired from Nokia. The company made that buy in 2013 and, earlier this year, a Finnish startup called HMD acquired the hardware licensure rights while Foxconn is on board for manufacturing and distribution.
The apparent growth area right now is in cloud-computing services. In reporting financials from its second fiscal quarter, Microsoft grew revenue from its Azure platform by 140% year-over-year.
“Businesses everywhere are using the Microsoft Cloud as their digital platform to drive their ambitious transformation agendas,” said Satya Nadella, CEO at Microsoft. “Businesses are also piloting Windows 10, which will drive deployments beyond 200 million active devices.”
Revenue from “intelligent cloud” totaled $6.3 billion with 10% revenue growth from server products and cloud services; the strong growth in Azure revenue; and enterprise mobility solution adoption from “over one-third of the Fortune 500.”
Microsoft also acquired social networking platform LinkedIn earlier this year.
Industry analyst Jeff Kagan wondered, “Does a software company understand how to grow this business? If not, will it take a hands-off approach? I fear the answer to both questions is no. Then again, it’s hard to feel bad for Microsoft. According to many, the company has been abusive to customers for so many years that many users don’t feel a good connection to the company. And that is one of the key reasons for its smartphone failure.”
