With a plan to cut about 14% of their employees, Microsoft hopes that a smaller company is a stronger company. Most cuts seem to come from their recently acquired Nokia phone business whose phone line was Android based. The division will now devote its time and energy to phones running Windows instead. Where the rest of the cuts come from will be known in the next few months.
Clearly though, cutting jobs is not the means to a more nimble, more customer focused company. Corporate culture starts at the top and it will be Nardella's job to shape and instill a new mission and strategy down into the ranks. That change will not come easy. Where the other business units fit in to the new strategy has already caused some to speculate that XBox could be spun or sold off. Given the success of XBox to the bottom line, such a move could also hurt the business. On the other hand, it could also allow Microsoft to apply a more laser focus on what it needs to do well to stay relevant in the coming years. These layoffs are simply the first step in a long process.