More to Microsoft Job Cuts Than Just Gutting Phones
As most expected, there’s more to Microsoft’s (MSFT) 7,800 job cuts, $7.6 billion write-off, phone hardware reorganization and gutting of the handset business it bought from Nokia in late 2013.
The combination of all of the above and Microsoft’s course reversal on its display ad business–sending it off to AOL to handle–will affect the vendor’s Sales, Marketing and Services Group (SMS&G) in lost positions and a refocusing of priorities, based on an email sent from Kevin Turner, Microsoft chief operating officer, to his charges, as ZDNet reported.
Here’s the top-line takeaways from Turner’s internal email:
- Microsoft Mobile Device Sales (MMDS) now are part of the Consumer Channels Group (CCG).
- There will be layoffs in MMDS and CCG.
- Microsoft will take a similar approach to Windows Phones as it has with Surface, focusing on channels and markets that deliver the best ROI.
- Frank Holland will run the Display Advertising Group.
- Rik van der Kooi will move from the Applications and Services Group to SMSG, reporting to Turner.
- Microsoft’s search-ad team will move to SMSG.
Here’s the text of Turner’s memo:
From: Kevin Turner
Sent: Wednesday, July 08, 2015 9:43 AM
Subject: FW: Sharpening our focus
This morning, Satya explained the new strategic direction for our family of devices and some changes that result from the display advertising news shared last week. Both of these changes further align our business and transformation initiatives as a company, but they also may have a direct impact on some of our SMSG employees. These situations are never easy, and we are committed to doing everything we can to help our impacted team members through these transitions with the utmost care, dignity, and respect.
To align with our new strategy to enhance the Windows device ecosystem, we are integrating Microsoft Mobile Device Sales (MMDS) underneath the Consumer Channels Group (CCG). Our CCG organization will continue to be led by Jude Buckley, and Chris Weber will continue leading our MMDS team reporting to Jude. Going forward, we will focus on building the very best Windows phones on a quicker timeline. We will also focus on the channels and markets that offer the best returns. This is a similar approach to the one we have taken with Surface, which has been very successful. Phones remain a critical component of the Microsoft device portfolio and an important piece of our mobility strategy, but a restructuring is in order.
In the advertising business, our recent partnerships with Yahoo!, AOL, and AppNexus will allow us to focus on our Bing search advertising strength. As a result, we are changing our organizational structure to better align our business and set us up for success. Going forward, Frank Holland will run the Display Advertising organization. Rik van der Kooi will move to SMSG, reporting directly to me. He will continue to lead the Search and Holistic Monetization organizations focusing on consumer service monetization including search advertising. While Rik has spent the last several years in the product group, he has been a close partner to SMSG as the Advertising business group owner. Please join me in welcoming Rik and his team to SMSG.
We expect that both of these changes will result in difficult headcount reductions in the direct and supporting organizations. There may also be other reductions around the world as we further align our business for success in FY16. These transitions are difficult, and to employees who may be impacted by these plans, I would like to extend my sincere appreciation and thank you for your service and dedication to Microsoft.
As a team, we have a lot of work ahead of us in FY16 and beyond, but I am confident that working together we will make Microsoft a leader in the mobile-first, cloud-first world.
Thank you for all of your hard work and support.