Satya Nadella, Microsoft’s new CEO, recently interacted with media persons and said that 18,000 job cuts will help the company to perform better. Some business analysts supported this move, and even suggested that Nadella is cleaning mess created by Microsoft’s former CEO, Steve Ballmer. Here are some of the most important aspects of this recently cooked story.
Cost cutting instead of focusing on innovation
These days, most of the CEOs working for Fortune 500 companies seem to believe that saving is just like earning. It appears as if they don’t want to innovate something new; they just try to find ways to reduce company’s operational costs, so that board of directors can see some profit on those performance graphs. Microsoft’s CEO, Satya Nadella also seems to be on the same train.
Former CEO Steve Ballmer was planning to diversify Microsoft’s business by buying handset maker Nokia and other small businesses. However, Nadella seems to be in mood to wrap up Ballmer’s plans to diversify company’s portfolio. His axe has already hit Microsoft’s Nokia and Xbox entertainment unit.
Bye-Bye Nokia Android
Nadella recently announced that the company will lay off 18,000 employees during next 12 months in order to improve the organisation’s performance. Microsoft’s Nokia unit will witness most of these job cuts.
Microsoft also declared last week that its Nokia arm will stop manufacturing Nokia X smartphones which support Android apps. Nokia X family phones were launched in February 2014. These phones offer the combination of Android apps and Microsoft operating system’s design. The company also indicated that the designs used in Nokia X family handsets will be further used in Nokia’s Lumia devices which work on windows operating system.
Reports suggest that Nokia was working on their X family phones since last two years. The company initially planned to develop its X family handsets to compete with Samsung and other handset makers which offer Android powered smartphones. However, Microsoft took over Nokia in April this year, and came up with new plans.
Industry experts suggest that X family handsets did not create the kind of history that Nokia was looking for. But these devices did manage to attract buyers in emerging markets like India.
Xbox Entertainment will shutter down
Microsoft’s ambitious project, the Xbox Entertainment Studio, will also shutter down by the end of this year. Microsoft had launched this studio back in 2012, and the company had roped in Steven Spielberg to create series based on the famous sci-fi video game, Halo.
The business software developer had launched Xbox Entertainment to produce its own TV shows and compete with online entertainment giants like Amazon and Netflix. However, the recent 18,000 job cuts also includes considerable amount of jobs from Xbox Entertainment.
Microsoft’s recent press release suggests that some of the shows which are under production in this studio will not be cancelled. Xbox will also continue offering sports content.
Industry experts have set their eyes to see if Nadella has something else to offer besides cost cutting plans.
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