When Microsoft announced Nokia’s Devices and Services acquisition deal, approximately 32,000 people were transferred to Microsoft, including 4,700 people in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging of products worldwide. Microsoft’s head count increased by over 25% – 30% as part of this single deal. Whenever such large deals happen, layoffs will follow due to restructuring. During the announcement, Steve Ballmer announced that Microsoft is planning to integrate all global marketing under Tami Reller and Mark Penn to have a unified brand and advertising strategy. Also, Finance, Legal, HR, Communications, DX / Evangelism, Customer Care and Business Development will integrate functionally at Microsoft and ICM / IT will also integrate functionally for traditional IT roles. Given overlap of lots of jobs, everyone is expecting Microsoft to announce the same.
GigaOM recently reported that Microsoft is going to announce the layoffs soon.
Look, [Microsoft CEO Steve] Ballmer buys Nokia and adds 25,000 people and a business that makes no money, so do the math.”
Microsoft employed about 100,000 people worldwide before Nokia and some insiders expect cuts could be extensive, perhaps up to 10 percent of total headcount. Marketing teams are usually streamlined and re-orged during these shakeups and other sources said internal IT staff is also on the block.
During Q&A, Steve Ballmer and Amy Hood said the following regarding integration,
BRENT THILL: Thanks. Just on the cost rationalization. Nokia has 32,000 employees versus Microsoft at 99,000. A considerable bulk of employees. Can you just talk about the rationalization over time and your view how that plays out?
STEVE BALLMER: Amy will take it. I do want to highlight that in many hardware companies, manufacturing labor is primarily outsourced. And Amy can remind us the numbers, but in Nokia, there is more in-sourced manufacturing. Nokia has had a strategy about that that, obviously, they’ve executed very well. But you kind of have apples and oranges a little bit between the 32,000 and our almost 100,000. But Amy, why don’t you provide some context and detail?
AMY HOOD: Sure. Thanks, Brent. About 18,000 of those 32,000 employees are really directly a part of the manufacturing business. And so I think a better way as you think about the scale and opportunity is to really focus on the percentage of Nokia outside of that.
I actually think both Steve and Stephen did a thoughtful job in the execution slide about talking really about the philosophy we’re using as we go through the integration process around the benefits of the incremental sales force that we’re getting with Chris and his team, as well as really going through and being thoughtful about the rationalization so that we get to one voice, one brand, one team that can best execute and be efficient.