Apple stocks are soaring. Nintendo makes a comeback, thanks to Pokemon Go. Amazon has never been better. But one tech giant is downsizing. Microsoft plans 2,850 job cuts.
This adds to the 7,400 job cuts that occurred between July 2015 and June 2016. These new cuts began early this month. They will continue through 2017. You may think, “But it’s Microsoft. These numbers are nothing, right?” ?Not really. Microsoft employs 113,000 people. Over half those jobs belong to Americans. The majority of the 2,850 people have already been notified. It’s been announced COO Kevin Turner was leaving Microsoft for another company. We don’t know which company that is.
What’s to blame for these jobs cuts? Acquisitions and company restructure are to blame. Back in 2013, Microsoft acquired cell phone maker Nokia. That alone made the company take a 7.6 billion dollar write down. This doesn’t include restructuring costs, which run around $850 million. Many insiders and analysts call the Nokia/Microsoft merge the worst acquisition in tech history. In the months following this acquisition, 18,000 were laid off. However, this round of cuts will hit the hardware and global sales division especially hard. In a filing to the SEC, Microsoft wrote, “In connection with the restructuring plans, we incurred restructuring charges of $501 million in fiscal year 2016, including severance expenses and other ?costs. We do not expect to incur additional charges for these restructuring plans in subsequent years.”
But how do they know that? It seems this Microsoft/Nokia deal has caused far more harm than good. This could have created jobs. Instead, over 27,000 have been lost. This could have made Microsoft money. Instead, they’re hemorrhaging billions of dollars. I’ve never been a fan of huge acquisitions. I think it cuts out competition and paves the way for monopoly. But some acquisitions have gone well. This one has gone horribly. Do you think this is the end of Microsoft job cuts? When will this bleeding stop?