{Tech} Microsoft’s Layoffs & Why You Should Care

As I’ve mentioned before, I’m integrating my “lifestyle” blog with my “tech” blog. I know many of you aren’t techies and some probably don’t even have Twitter yet (I’m looking at you Sara…). But let me explain why you should care that Microsoft is laying off 18,000 employees. Because that’s some scary stuff.

In an announcement today (which you can read more about here), the new CEO of Microsoft, Satya Nadella, said that basically, they’re cutting around 18,000 jobs, majority of which are in the Nokia division(of which they just recently acquired). Also reported today was the announcement that they are shutting down the Xbox Entertainment Studios, which was key in combining TV and gaming. For non-gamers, I can understand where the latter statement has you going “Okay… so what?” And again, I’ll explain.

Let’s take the first section – Microsoft is laying off 18,000 employees. EIGHTEEN THOUSAND. Nadella stated layoffs would affect factory and professional workers. The statement also went on to say that it would be flattening it’s organizational structure and making the company more agile, “eliminating management layers”. One final thing to note from the statement is that within the next 6 months, the first 13,000 employees would be eliminated. Guys, that’s a huge number. Obviously we can’t see the future and maybe this is a turn in the right direction for the tech giant. While Microsoft has held pretty steady the last few years with competitors (Google, Apple), there are places where it’s lost footing (I’m looking at you, Windows Phone…). I suppose that is why they’re trying to cut their losses with the Nokia division, but they just acquired the company last year. Why would you spend billions on an acquisition when all you’re going to do is shove off most of it?

Why you should care: Any company laying off any number of employees is obviously a bad sign. It means money isn’t coming in. It means these employees now add to the unemployment rate, which was getting better. Paired with this article I read earlier today, I kind of have a bad feeling about the state of the economy in this country. Form your own opinions, but 18,000 unemployed people from one company is a rough blow.

Now to tackle the second section, Xbox Entertainment Studios (XES). If you aren’t close to the gaming, tech and even just media worlds you may be scratching your head. XES was created in early 2013 as a way to bridge the gap between gaming and TV and was on track to do so. It was created “to develop scripted, reality and interactive programming for Microsoft’s Xbox division.”  The main project that many people (I say many, I don’t know. I was!) were looking forward to was Halo: The Television Series. What makes this awesome besides the fact that it’s Halo? Oh I don’t know, just a no name executive producer was on it (Steven Spielberg!!!!!!!!).

Why you should care: Here’s the layman version of a very long, nerdy ramble – one day, everything is going to be one. It just is. TV networks are trying to get online, YouTubers are getting into books and TV deals. The lines of traditional and new media are bleeding into each other and to cut out any effort towards mixed media (TV programming integrated on a gaming console), to me, seems a bit backwards. Especially considering in Nadella’s layoff statement he mentioned more focus on the Xbox division. Why would you cut a budding program that seemed to be gaining traction with consumers/gamers? Again, Nadella/Microsoft may have some foresight into why this is good.

So what do you think? Do you care at all? Does this at least make you question what’s going on in business today? Let me know in the comments!
Also let me know in the comments if you like me integrating tech news/info into here – I think more people need just a really basic run down of what’s going on in that industry, because so many of our lives are impacted by it!

  • This is just frightening all around. When I first heard the layoff news, I thought that more than half of their company would be laid off. It’s just shocking because it’s such a large number of people. I work in marketing, and the merging of TV and digital is on the rise. Soon, it’s going to probably be merged into Interactive, but who knows right now!

    I also think it will be interesting to track Apple’s recent iPad sales news and how that impacts not only the tablet industry but also the tech giant.