14 DAY TRIAL // Microsoft's struggle to cut costs continues despite the thousands of jobs impacted by its global reorganization, and a new report published today claims the company has just fired 1,000 more people.
The news might come as a big surprise for many, given the fact that Microsoft was believed to have already completed its cost-cutting efforts concerning the workforce, but The New York Times writes that two people close to the matter have confirmed the layoffs.
It turns out that the new job cut is just a continuation of the original plan that came into effect after Microsoft completed the acquisition of Nokia's Devices and Services unit. At that time, CEO Satya Nadella revealed that 18,000 people would be affected by the job cuts, most of them former workers of Nokia, but several company divisions have also been impacted.
A company representative has confirmed for the aforementioned source that some job cuts have indeed been made and revealed that they impact more than just a single division.
“The job reductions were spread across more than one business area and country and reflect adaptations to business needs,” he is quoted as saying.
Dropping revenues
Microsoft's intention to cut costs comes as no big surprise, as the company's revenues dropped during the first quarter of FY 2016 and its biggest divisions all reported smaller figures as compared to the same period the year before.
For example, the phone revenues dropped 54 percent, while Windows and Surface also dropped by several percentage points. This is mostly due to the fact that no new devices have been launched in the last 12 months, which has had a big impact on its revenues.
But all of these are expected to change in the coming months, as Microsoft is not only cutting jobs but is also working to overhaul its product lineup with new phones and tablets. The next quarter is expected to bring a much stronger performance.