Microsoft Layoffs: Restructuring to Increase Profits

Microsoft revealed it was releasing 18,000 jobs of its workforce on July 17th. It’s the largest layoff in the company’s history. In addition to the announcement of the massive layoffs, Microsoft has also informed thousands of its contract workforces that they will be touched by the job cuts as well.

Though this may not appear as severe of a blow as the cuts are for employees, it’s essential to understand just how many contractors this policy will affect. In 2009, Microsoft’s external staff totaled around 80,000. When these numbers are considered, Microsoft’s layoffs are much more extensive than just the 18,000 employees originally stated.

How much will these drastic changes affect the culture, and more importantly, the viability of Microsoft? Due to the recent events, the company will no longer be considered as a secure place of full-time and contract employment, the company must make immense modifications to guarantee that it can sustain the loyalty of its employees, or jeopardize tumbling downward in the face of other technology companies that will certainly take full advantage of the newly unemployed talent currently seeking professional refuge.

The layoffs are considered a reformation as the company shifts its focus from electronic programs such as Office and Windows products and into phones and mobile devices. What’s settling is the cuts come as no surprise to Microsoft employees, who have been informed since the company acquired Nokia last year that workforce reductions would be occurring. Microsoft is expected to eliminate jobs in areas that intersect with Nokia, like market, software testing, and engineering.

And for the thousands of unemployed tech savvy professionals, the light at the end of the tunnel may not be too far in reach. Microsoft cuts will likely have a positive impact on Seattle’s flourishing but talent-starved startup community. It will release talent into the pool to join tech startups, as well as to create new companies.

As the author of the award winning and best selling book, Sell Your Business For More Than It’s Worth, I understand the necessity of labor cutbacks in the vain of building a sustainable company that must evolve with the times to continue its success. I understand that a total of 18,000 people losing their jobs is never a good thing for the individuals, but ultimately, Microsoft’s considerable reductions will be good for the company. Microsoft has been falling behind competitors for years, suffering from an absence of dexterity and a tight grip on outdated traditions. Microsoft must evolve, fix its culture and be innovative, even if that means a lot of growing pains along the way.

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