IT Gloom and Doom: Microsoft May Shed Thousands for the Third Consecutive Year

Anirban Ghoshal

Microsoft is at it again and this it time it may spell misery for thousands of employees under its sales team banner as the company tries to adapt to changing trends in the IT industry and keep itself profitable.

Microsoft, the Redmond-headquartered tech giant, may soon lay off thousands of employees as the company looks to turn to automation for higher productivity standards.

Microsoft had to let go of nearly 7,800 staffers, including at least 900 from its sales group, last year as it pulled down the shutter on its smartphone business thereby handing off the company licence to HMD Global which has already released three smartphones and a feature phone at the annual Mobile World Congress trade show in Barcelona.

The decision to close operations on the smartphone business came to fore in July 2015 as the Indian-origin Satya Nadella-led IT giant wrote down $7.6 billion of its Nokia acquisition.

Last year, Microsoft announced that it would cut 2,850 jobs — , according to The Seattle Times — having two months earlier said it would let go of 1,850 staff related to its smartphone business.

According to major news outlets, which include, Bloomberg and The Seattle Times, rumours are abuzz that the company may be forced again to tell people to go home due to a restructuring which will is also set to include an organizational merger. The deal is expected to rope in its enterprise customer unit and one or more of its SME-focused divisions.

While Microsoft has declined to comment, a report from TechCrunch claims that the layoffs might be the result of a renewed focus on activating cloud services for greater efficiency and productivity in the company’s sales and marketing divisions.

Some reports also hinted that the layoffs might be the result of a change in leadership. Executives Judson Althoff and Jean-Philippe Courtois took charge of Microsoft’s sales and marketing divisions following the exit of long-serving COO Kevin Turner last summer. Althoff, for one, has been public in his criticism of previous sales approaches, and he is keen to make Azure a central part of the focus.

MIcrosoft, last year, laid off around 2,850 staffers citing the closure of its handset business.

While the brunt of the job cuts is expected to be felt throughout the world, it becomes an entirely different situation for Indian IT executives. The country is already under pressure from H1-B visa norms change in the US post President Donald Trump’s election victory. The government has been trying to come up with more jobs in Europe and senior government officials in the know of things have said that the country is doing its best to neutralize the situation.

Cognizant or better known as CTS was also expected to lay off 6,000-10,000 staffers on the basis of redundant and non-performing assets. CTS was not the only one as downsizing fears gripped employees of Wipro, Infosys and TCS post slow quarters after Prime Minister Narendra Modi announced demonetisation.

The hiring process for 2017 is likely to be slow with IT majors expected to cut by 40% the engineering graduates they planned to hire, Hindustan Times reported citing industry sources. The report also quotes IT sector veteran Mohandas Pai saying in December last year that nearly 20 crore middle-class youth would have no jobs or less jobs by 2025 due to increasing automation and improvement in technology.

If history is of any lesson, this is nothing unusual for Microsoft as in recent years the company has announced reduction of headcounts typically in July — a time when it ends its fiscal year.

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