Microsoft Corporation (MSFT) is reportedly planning to shed approximately 100 jobs, under its restructuring program, to rightsize its business processes.
The largest software developer in the U.S. intends to lay off employees, primarily from its advertising division, responsible for selling advertising space across MSN, Bing, Xbox, Outlook, Skype and other Microsoft properties. These layoffs are expected to be carried across the U.S., U.K. and other offices worldwide.
In July, Microsoft announced its plans to cut its workforce by nearly 14%, i.e. 18,000 employees, over the next one year. At that time, Microsoft had nearly 127,000 employees worldwide, far more than its competitors — Apple (AAPL) and Google (GOOGL). Microsoft announced these massive job cuts as a strategic move to streamline the cost structure and boost the bottom line.
In the first round of job cuts, Microsoft laid off 13,000 employees, mostly from the recently-acquired Nokia (NOK) business. In September, the company carried out the second round laying off 2,100 employees, of which 747 were in the Seattle area alone, while the rest were from across its global operations and teams.
Microsoft intends to complete the job cuts across its global operations over the next seven months.
Trimming its workforce will help Microsoft combat losses due to the persistent decline in worldwide PC sales as the demand for smartphones and tablets rises among consumers and enterprises. It will also help Microsoft to lower operating expenses.
The realignment program is part of CEO Satya Nadella’s strategic plan to make the decision-making process more efficient by eliminating several layers of management and also aligning operations with the new growth plans. His vision focuses on making the company more agile and faster to concentrate effectively on emerging areas like mobile, wearables, cloud-computing and productivity software, as the software developer goes from a “devices and services” company to a “cloud-first mobile-first” one.
The last time Microsoft announced layoffs was in 2009 when 5% of its workforce was eliminated in order to deal with the recession.
Microsoft carries a Zacks Rank #3 (Hold).
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