Microsoft’s new CEO Satya Nadella dropped the other shoe today by announcing layoffs of up to 18,000 employees over the next year. 13,000 will be announced imminently and of those, “our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers.” I expect that, as usual, it’s better to be working for the the absorber than the absorbee.
As for the remaining 5,000, “the vast majority of employees whose jobs will be eliminated will be notified over the next six months.”
Tim Culpan and Dina Bass from Bloomberg have got a scoop – Microsoft Said to Cut Windows Price 70% to Counter Rivals:
Microsoft Corp. (MSFT) is cutting the price of Windows 8.1 by 70 percent for makers of low-cost computers and tablets as they try to fend off cheaper rivals like Google Inc. (GOOG)’s Chromebooks, people familiar with the program said.
Manufacturers will be charged $15 to license Windows 8.1 and preinstall it on devices that retail for less than $250, instead of the usual fee of $50, said the people, who asked not to be named because the details aren’t public. The discount will apply to any products that meet the price limit, with no restrictions on the size or type of device, the people said.
It won’t require products that use the cheaper licensing to complete logo certification, a process that verifies hardware compatibility, one of the people said. Devices aren’t required to be touch-screen compatible, they said.
While the regular Windows list price was $50, some of the largest global computer makers paid closer to $30 after incentives such as marketing funds provided by Microsoft, the people said. Products that receive discounted license fees won’t be eligible for such marketing support and incentives, one of the people said.
Free always beats fee as long as the free product is good enough and Chromebooks are evidently good enough for a lot of folks. Microsoft could try to appeal to the carriage trade like Apple but are way behind on both low end apps and cachet. I don’t really think a price cut is going to give Microsoft much more traction.
Confirming the most recent rumors, Microsoft went inside and chose 22 year veteran Satya Nadella as the new CEO. Perhaps more interesting is that board member John Thompson becomes Chairman:
Thompson has been a member of Microsoft’s board for two years. He has also been leading Microsoft’s CEO search for the past five months-plus. (In a new video clip of Thompson, which Microsoft posted today, Thompson claims Nadella was the search committee’s “first and unanimous choice” after reviewing all the CEO candidates.)
True or not, it behooves them to say so.
He is the CEO of Virtual Instruments, a company that manages virtual-physical cloud migrations and an investor in a handful of early-stage tech companies in Silicon Valley. Thompson also served as CEO of Symanec for ten years, through 2009, and on Symantec’s board until 2011. Before that, he held a variety of management positions at IBM in sales, marketing, software development for a variety of products including (somewhat ironically), OS/2.
The irony is rich in the tech business. As for Bill Gates, he and Steve Ballmer are still board members and Gates has a new title of Founder and Technology Advisor with a reported commitment of a third of his time to meet with product groups. We’ll see.
Even as Microsoft is poised to name a new CEO — it has been reported that the company will name insider Satya Nadella, head of its cloud and enterprise group — the process leading up to the announcement has emerged as, quite literally, a textbook example of how not to do CEO succession.
This isn’t how it’s supposed to work. Microsoft is a corporate aristocrat, albeit an eccentric duke, for which succession should be smooth, non-controversial, and unsurprising. Instead, at least 17 candidates were publicly speculated upon; leaks from employees and some of the candidates themselves competed for advantage in the media; a few presumed candidates, some of whom may never have been candidates at all, publicly disclaimed interest in the job; and Isle of Man bookies offered odds on the eventual winner.
And after the circus leaves town, some lucky person gets to clean up the mess left behind. Well, I’m sure he will be well compensated.