After announcing its plans for cutting 14% of its 125K employees in July, Microsoft has laid off 2.1K workers and closed down a Silicon Valley research lab focused on distributed computing R&D. While its Nokia phone unit is set to see the brunt of the company’s job cuts, Microsoft (NASDAQ:MSFT) has already confirmed the closure of its Xbox content studio ops, and is reportedly planning to lay off Windows test engineers as it moves to a faster release cycle.
14% of their workforce. Wow. Pay attention, Folks. I know Microsoft isn’t cutting edge technology anymore – but this is an internet based company, still extraordinarily relevant.
Name a big company that isn’t reducing permanent employees. If you see two law firms or two accounting firms consolidating, that doesn’t mean growth. That means cost reductions, economies of scale, the need for fewer management positions. Short-term those decisions can result in a need for a larger office footprint. But long-term every company still faces the reality of increased competition from non-local sources through the internet. And that means reduced need for traditional office space. Period.