This morning, Microsoft announced a new round of job cuts. It recently acquired Nokia and that seems to be where the bulk of the 18,000 hits are going to come from. Let’s try to parse why they’re doing this, shall we? Here’s an explanation from new CEO Satya Nadella:
The larger-than-expected cuts are the deepest in the company’s 39-year history and come five months into the tenure of Chief Executive Satya Nadella, who outlined plans for a “leaner” business in a public memo to employees last week.
“We will simplify the way we work to drive greater accountability, become more agile and move faster,” Nadella wrote to employees in a memo made public early Thursday. “We plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making.”
The size of the cuts were welcomed by Wall Street, which viewed Microsoft as bloated under previous CEO Steve Ballmer, topping 127,000 in headcount after absorbing Nokia earlier this year.
“This is about double what the Street was expecting,” said Daniel Ives, an analyst at FBR Capital Markets. “Nadella is clearing the decks for the new fiscal year. He is cleaning up part of the mess that Ballmer left.”
The goal is to simplify the work process. That sounds good. Everyone likes simplicity. It makes work easier to deal with if the path forward is cleared of unnecessary complexity and clutter. But that’s not really why they’re simplifying, is it? The goal of the simplification is actually to “drive greater accountability”. On the surface, this also seems reasonable until we stop to consider, accountable to whom? If you’ve been paying attention in the last decade, this usually refers to shareholders. Shareholders want greater accountability. Does that mean they want a bunch of reports and retrospective analyses to peruse at their leisure to make sure everything is being done with an eye towards simplicity, agility and speed? Probably not. Accountability is generally a code word for shareholders wanting to see that they’re not spending a penny more on people than they absolutely have to so that they can increase the amount of money they can
hoard get for their shares. It will be up to these 18,000 people to account for their existence.
It sounds like they’re going to get rid of management- everywhere. Good luck with that! </snark>
Finally, we see that Steve Ballmer left a mess. Not sure what that’s all about since I’m not in the software side of tech and I only use Microsoft products under duress. But just because the company now has 127,000 people doesn’t mean that some of them necessarily have to go. Unless they need to be accountable, of course. I’m sure this comes as no surprise to the workers at Nokia but no one forced Microsoft to buy them.
So, to recap, Microsoft buys struggling cell phone manufacturer Nokia, drinks its smooth and tasty patent milkshake and discards the worker bees because they are no longer sufficiently accountable.
If anyone is still wondering why the US doesn’t make anything worth exporting, look no further than this layoff announcement and the rest of the carnage happening at IBM, Cisco, Intel and Hewlett-Packard. It looks like a bloody hemorrhage this month. There will be a lot of tech workers hitting the virtual pavement. Contrast this with the way Germany handles its STEM workers. When times get tough, they reduce their hours to part time and keep their wages high. That way, when the economy recovers, they can rev their engines up again and work productively with a work force that has not lost its critical skills.
German shareholders and the government work together in a smart way to ensure they have the skills to compete in the market later. American shareholders and government? ehhhhhh, not so much. Finland (the home of Nokia) must be thrilled with Microsoft’s announcement, even though they must have been expecting it since the acquisition.
Someone should tell the Microsoft people to stop referring to its workforce as a “mess” that needs to be cleaned up.
In the meantime, Derek Lowe wrote another post about the prospects of new Chemistry PhDs. It looks like the number of post docs has gone down in recent years and the number of unemployed PhDs has gone up. So, to recap, you spend 4 years as an undergrad and about 5-7 years getting your PhD in a very difficult subject that demands sharp, innovative thinking and many thousands of hours of lab work and what do you get for your hard work? Not much.
Paraphrasing what a former colleague told me in 2009, when it comes right down to it, the reason why employers say they can’t find good help anymore is because what they want, what they really, really want, is a new graduate with 25 years of experience. I would add, and someone who they can make accountable whenever they please.
Hey, did you hear about the CDC losing track of influenza and smallpox vials? Funny what persistent underfunding and a round of sequestering will do to your disease control mechanisms. I’m not surprised after what I heard during my trip to Cambridge, MA in May. A recent visitor to the CDC said that the place is demoralized and disorganized with co-workers not even knowing who was in their groups. I don’t blame this on government since the CDC didn’t used to be this FUBARed. No, I blame it on the authoritarian nut cases in the Republican party whose intractable, unyielding, “take-no-prisoners”, never compromise, never surrender attitude and actions are putting the rest of us at risk.
We need to hold them accountable.
Oh, by the way, congresspersons who vote for more H1B visas in the immigration bill before the excess glut of American STEM workers are re-employed should be vigorously primaried.