Microsoft Job Cuts – Course Correction Or Cause For Concern?

Microsoft Job Cuts – Course Correction Or Cause For Concern?
Facebook may have decided that you shouldn’t see the news, but we think you deserve to be in the know with Lifehacker Australia’s content. To sign up for our daily newsletter covering the latest news, hacks and reviews, head HERE. For a running feed of all our stories, follow us on Twitter HERE. Or you can bookmark the Lifehacker Australia homepage to visit whenever you need a fix.

Microsoft has announced the loss of 3000 jobs from it ranks – most of which will be outside their American operations. While it’s never good for people to lose their jobs, I’m not sure it points to a dim future. But the Microsoft from the start of this century is fine, replaced with a very different business. And personnel changes are part of that change.

The days of Windows and Office being Microsoft’s cash cows are ending. Windows is now being upgraded twice a year at no charge and, slowly but surely, users are moving away from boxed software with perpetual licenses to cloud-based and other subscription offerings.

It makes sense that the number of people selling Windows Server licenses, for examples, will fall as more people shift to Azure and use cloud services to replace large slabs of their on-prem computing power.

Logically, that suggests to me that as the shift has been taking place Microsoft has had two workforce’s operating. One supports the growing cloud and subscription software and infrastructure businesses and another that focuses on the legacy product suite.

According to Wikipedia, Microsoft employed about 114,000 staff a year ago. The loss of 3000 that was announced represents about 2.6% of that number.

I’d bet many companies could walk around the office and find two or three people out of every hundred who could be spared – particularly if the business has undergone a significant transformation.

So, while it’s bad news for those 3000 people and their families I don’t think this is a sign of the fall of one of the biggest technology empires.