Microsoft Announces Big Layoff

By Jeff Muscarella

Partner, IT and Telecommunications, NPI

July 08, 2015

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Microsoft today announced that it will layoff 7,800 – approximately 6 percent of its workforce. It will also take a $7.6 billion charge during its fourth fiscal quarter (ended 6/30). While both of these changes are directly linked to the vendor’s highly-criticized acquisition of Nokia in 2014, they are telling of the state of affairs in Redmond. Microsoft is dealing with a significant transition that intentionally shifts their focus from devices and on-premise offerings to cloud dominance. Part of that journey involves offloading dead weight. Another part is weathering the (expected, but nonetheless difficult) revenue impact of replacing traditional on-premise revenues with subscription revenues.

If you’re a Microsoft enterprise customer, you will feel the pressure from your Microsoft sales team to:

1. Migrate to the cloud. (Make sure you optimize your leverage).
2. Engage in formal and informal licensing audit requests. (If you haven’t received a request yet, expect to receive one very soon. And remember that Microsoft’s goal is to find additional revenue in your account.)
3. Get more of your spend through changing product use rights and licensing/pricing changes. (Those customers that can’t accurately interpret changes will find themselves overspending.)

How ready are you?

 

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