SEATTLE:
Microsoft Corp Chief Executive Satya Nadella
deferred any comment on widely expected job cuts at the software
company on Thursday, after circulating a memo to employees promising to
"flatten the organization and develop leaner business processes."
Nadella said he would address detailed organizational and financial
issues for the company's new financial year, which started at the
beginning of this month, when Microsoft reports quarterly earnings on
July 22.
"There will be many opportunities for me to talk more about our
specific fiscal plans on the 22nd," Nadella said in a telephone
interview.
Since absorbing the handset business of Nokia this spring, Microsoft has 127,000 employees, far more than rivals
Apple Inc
and
Google Inc. Wall Street is expecting Nadella to make some cuts, which would represent Microsoft's first major layoffs since 2009.
"With recent chatter on the Street about potential head count
reductions at Microsoft it was important for Nadella to be visible and
set an optimistic tone heading into the next few months, especially on
the heels of the Nokia integration," said
Daniel Ives, an analyst at FBR Capital
Markets.
In a 3,105-word memo sent to employees on Friday and posted on
Microsoft's website, Nadella set out his vision for the company five
months after taking over as CEO from
Steve Ballmer.
Most noticeably he described Microsoft as a "productivity and platform
company" focused on mobile and cloud computing, a subtle advance on
Ballmer's reinvention of Microsoft as a "devices and services" company,
which could signal less emphasis on manufacturing devices.
Nadella did not go into detail about specific changes he planned for Microsoft, but signaled that change was needed.
"Nothing is off the table in how we think about shifting our culture to
deliver on this core strategy," Nadella wrote in the memo.
Nadella wrote that he had asked his senior leaders to "evaluate
opportunities to advance their innovation processes and simplify their
operations and how they work."
He did not discuss in great detail
individual businesses, but did say he was committed to developing the
Xbox gaming platform, pouring water on persistent talk that the unit
might be spun off.
He did not address the unprofitable Bing
search engine directly in the memo - which some investors have called
for Microsoft to ditch - but did not indicate that he was thinking of
backing away from it in an interview.
"To me, Bing is a much more core
productivity
technology, it's task completion in its essence," Nadella told Reuters.
"That's one of the reasons why internally we get that a lot more than
externally."
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