Company / division: Microsoft
Microsoft Begins Bundling Windows and Office for Businesses (Jul 10, 2017)
Microsoft to Lay Off Thousands as Part of Reorganization (Jul 6, 2017)
Microsoft has now confirmed the layoffs which have been rumored for the last week or so, and which are the second part of the announcement made earlier this week regarding the restructuring of the company’s sales organization. CNBC says 3,000 jobs will go, while Mary Jo Foley at ZDNet, who I’m more inclined to trust with this stuff, says only that there will be “several thousand” cuts, with some of those losing jobs found roles elsewhere in the company. This is a relatively small round of layoffs for Microsoft given recent history, as the company’s core workforce excluding LinkedIn has fallen from a peak of around 128,000 in 2014 to just over 110,000 at the end of March already. The layoffs are likely to impact the sales team reorganized earlier this week, reflecting an ongoing shift away from legacy products towards cloud services. Over the last few years, Microsoft has been beefing up its support and consulting staff while reducing its engineering numbers considerably and keeping its overall sales and marketing staff roughly constant at around 50,000. Interestingly, Microsoft’s US/international employee split is now back at nearly 60/40, roughly where it was before the Nokia devices acquisition pushed it to about 48/52. The vast majority of the employees taken on during that period have now either been eliminated or moved to other roles in the company, though Microsoft currently has around 10,000 more core employees (and around 20,000 more including LinkedIn) than it did in mid-2013. Therefore, although this stinks for those being laid off, it’s not an enormous reorg by Microsoft standards, and mostly reflects subtler shifts in the emphasis of the sales and marketing teams and other effects from Microsoft’s ongoing move from legacy to cloud services, in what’s now become almost an annual ritual at the company.
Microsoft Unifies its Minecraft Apps (Jun 12, 2017)
Alongside its Xbox One X announcement, one other big announcement Microsoft made at E3 is a unification of its Minecraft apps, such that several major versions will now be interoperable and available for social play between different platforms. Interestingly, the original PC version of the game is the one that will be left out from all this interoperability, but the mobile, Xbox, and VR, and even Nintendo Switch will all get it as a free upgrade to the current version. And in-game purchases (DLC) will also be available on each version. In many ways, it’s a quirk of the way the Minecraft apps have developed that they haven’t had this compatibility in the past – surely, many kids (and adults) have wanted to play these games on all their devices all along, and have had to make do with different incompatible versions instead. So this is at least a logical step, though the exclusion of the original PC version still feels a little odd.
The Trump administration is holding the first meetings of its American Technology Council, led by Trump son-in-law and advisor Jared Kushner, later this month. Despite the recent contretemps between the tech industry and the administration, it appears most of the largest companies will still send senior leaders to the meetings, including CEOs or chairmen in many cases. Apple, Amazon, Alphabet, Microsoft, IBM, Oracle, Intel, Cisco, and others will all send at least one senior representative to the meetings. That’s a sign of the realism that still prevails at these companies despite broad opposition within their ranks to any kind of collaboration with the government. These companies still have policy objectives the government can and likely will help with, and disengaging entirely over those issues where there’s disagreement isn’t likely either to drive meaningfully different policies in those areas or achieve their broader goals. But that will make for some uncomfortable times for these leaders, most of whom looked pretty awkward at the first pre-inauguration meetings with Trump and his team. And these companies will face continued criticism from within Silicon Valley and elsewhere for their perceived compliance with the administration regardless.
Skype is one of those odd products – a fairly sizable communications property owned by a major tech company, and yet one which doesn’t make much money, isn’t growing much, and hasn’t really been focused on either messaging or social communication. It’s been clear, though, for some time that Microsoft would very much like Skype to be a big part of its consumer push and become more of a messaging- centric app, and the makeover it announced today seems like a big step in that direction. The new design, rolling out first on Android and later on other platforms, puts social sharing and messaging much more prominently in the app, but that’s no guarantee that people will actually use those features more or even see Skype as a natural place to do that kind of sharing. I only ever use Skype for work phone calls at this point, and others I’ve spoken to who use its messaging features use those almost exclusively for work communication too, so I’d be very curious to hear more from Microsoft about who is using messaging on Skype and what they’re using it for. My guess is that, for all the changes Microsoft is making here, it won’t be that much more successful than in the past in making Skype a mainstream consumer service or app for social communication and messaging. It doesn’t have the brand or the user base to make that objective work. It’s also adding in more bots, an effort that began with a bang at Build last year but has been quiet since, but again those will only be relevant inasmuch as people are spending a lot of time in Skype already and want and expect to find those interactions with brands and companies there. In the end, I don’t see anything here that makes me think Skype is going to become a radically different animal, even if it might look quite different after these changes. And that’s emblematic of Microsoft’s broader consumer challenges: it simply doesn’t have a broad-based consumer play at this point beyond productivity.