On Thursday, Microsoft did what many were expecting all week, and it wasn’t to announce a new product or service. The company courtesy of a employee wide email, announced that they would be cutting up to 18,000 jobs this year, the biggest ever, mainly due to the Nokia acquisition.
The massive job cuts were felt throughout Redmond, Silicon Valley, and the tech world. In addition, the company also announced that they would be shutting down the Xbox Entertainment Studios, which shows that the content first strategy was a mistake by Microsoft.
The company wide email announced that Microsoft would be shuttering up to 18,000 of its 127,104 employees. Microsoft stated that they are actively looking to cut 13,0000 of the jobs within the next six months, and be done with it over the next 12 months. That’s a big number from the company, and becoming a leaner Microsoft.
The realignment of the company, as announced by Satya Nadella, will cut part of Nokia Devices and Services personnel, and other divisions in the company. Many expected that there would be job cuts as a result of the purchase, but shows that they are adding roles as well in strategic areas as well.
Xbox Studios Gone But Sales Improve
In addition to the overall job cuts, Microsoft also announced that they would be closing down the Xbox Entertainment Studios. This part of the company was geared to produce original content, and original television programming. This we would imagine would eliminate current programs in development for the Xbox 360 and Xbox One.
But, with the shuttering of the Xbox Entertainment Studios, Microsoft’s Xbox unit had good news to share. Microsoft via its Xbox Wire announced that since they lowered the cost of the Xbox One to $399, they have seen sales of the Xbox One more than double in the US. This means that price was a main factor for many on the Xbox One, and will pose an important role as it goes against the Playstation 4 during the year. This is good news for the Xbox One.
Microsoft like any company has to get lean. Satya Nadella has a tough job, and he can’t always be Mr. Positive as today has shown.