Microsoft CEO Satya Nadella talks about his vision for the company in the mobile and cloud worlds during the Microsoft Worldwide Partner Conference in Washington, D.C., on Wednesday, (Olivier Douliery/Abaca Press/MCT)
Microsoft will cut 18,000 jobs in its biggest layoff ever
"They had to shed the notion that it was fortress Microsoft, where everything was Windows first," said Merv Adrian, a vice president of research at Gartner Inc. "They are moving from a company that has historically played catch-up for the last decade into a company that wants to go back into that leadership role that they were in long before, and that means a differently shaped Microsoft."
"There's hope for a faster, nimbler Microsoft," said Colin Gillis, senior technology analyst at BGC Partners. "The idea is to reduce the layers of management vertically and horizontally, so you can speed things up."
Microsoft, whose Windows operating system still powers most traditional computers, has fallen far behind Google, Apple, and Amazon in smartphones, tablets and servers — the areas of computing showing the most growth.
Microsoft's only previous mass layoff came in 2009, when the company announced that a "once-in-a-lifetime set of economic conditions" had forced it to cut 5,000 employees, about 6 percent of the workforce at the time. Since then many of the industry's original technology giants, including Intel, Hewlett-Packard and IBM, have announced reductions in their workforces to keep pace with the innovation coming out of Google, Amazon.com and startups.