Since the new CEO, Sataya Nadella, has taken charge, we have seen a lot of dynamic changes in Microsoft Corporation (NASDAQ:MSFT) from implementing a more productive approach to a lot of job cuts in the company.
Clement Teo, senior analyst at Forrester, was on CNBC recently and he discussed about Microsoft Corporation (NASDAQ:MSFT) and Nadella in particular. He thinks that the job cuts are part of the new strategy.
“He is a man on mission. I think he is got to remake Microsoft in the shortest possible time. I expect that the layoffs were really part of the plan when they bought Nokia. “Teo said.
He thinks that the execution of layoffs has happened now whereas it must be planned while they signed the deal and this happened few days before the next earnings so Nadella wanted to prepare the market for it. He said that the Xbox entertainment unit is going to be shut down which means a reduction of 200 jobs and most of the jobs that have been cut are the ones that replicate within the company so Microsoft Corporation (NASDAQ:MSFT) is trying to trim them down. However the bulk of the jobs will be from the handset division.
“So Microsoft is remaking itself to be an applications focused company, software, it is called. So devices is just a channel to that” He stated how Microsoft Corporation (NASDAQ:MSFT) wants to keep the focus on the software.
Teo said that the company needs to push into the smartphone market, especially after the Apple Inc. (NASDAQ:AAPL) – International Business Machines Corp. (NYSE:IBM) deal and he said the Microsoft Corporation (NASDAQ:MSFT) is going to respond to that by aligning the business units and consumer units together and pushing the value proposition into the enterprise space is going to be the key for the company.
The way ahead according to Teo is to get the applications out quickly and to make sure the layoffs don’t happen in series and this is the only set of layoffs Microsoft Corporation (NASDAQ:MSFT) makes which would also gain the faith of the market in the company.