Microsoft’s Mass Layoffs Facing Sharp Condemnation From Political Leaders
Microsoft has laid off a recording breaking number of its employees in a move the company says is meant to flatten the organization and jump start a more nimble development process. The move has been largely welcomed by investors as can be evidenced by Microsoft shares rising by a modest 3.84% in value on July 16, 2014 (the highest Microsoft’s close since the year 2000). That came shortly after Microsoft had announced its plan of reducing the headcounts at its organization.
Microsoft increased its employees’ headcounts by over 20,000 employees when it acquired Nokia. Shortly after closing that deal, Microsoft announced it will lay off 18,000 of its employees, out of which 12,500 employees will be from its hardware division. Microsoft sent out numerous memos to its staff explaining the reasons behind the changes in staffing.
While the mass lay-off makes a lot of economic sense, the move has not been taken kindly by various political leaders. For instance, U.S. Senator Jeff Sessions (R-AL), lashed out at Microsoft, expressing sentiments akin to outrage that the company would soon press for more high-skill visas in order to hire more foreign workers at home, yet it is laying off its own staff.
An excerpt of his statement reads, “Microsoft confirmed it will cut up to 18,000 jobs over the next year, part of the tech titan’s effort to streamline its business under a new CEO…
That is a significant action. Indeed, Microsoft employs about 125,000 people, and they are laying off 18,000. The company laid off 5,000 in 2009. Yet their founder and former leader, Mr. Gates, says we have to have more and more people come into our country to take those kinds of jobs.
It is pretty interesting, really. We need to be thinking about what it all means and ask ourselves: What is the situation today for American graduates of STEM degrees and technology degrees? Do we have enough? And do we need to have people come to our country to take those jobs? Or, indeed, do we not have a shortage of workers, and do we have difficulty of people finding jobs?”
His European counterparts, the Finnish authorities and the European Commission are equally unimpressed by Microsoft’s layoff in the country.
The EU Commissioner László Andor said, “I deeply regret the significant job losses announced by Microsoft today because of the impact these will have on so many individuals, their families and the local communities they live and work in. All sectors of the economy are undergoing changes as technology develops, and consumer demand evolves. Company restructuring is a fact of life, but it should be done in a socially responsible way, based on social dialogue and with due respect for applicable legislation on the information and consultation of workers and on collective redundancies.”
Microsoft said it will incur costs ranging between $1.1 billion to $1.6 billion in the layoff process over the next one year. But despite all the political opposition to Microsoft’s layoff, the company does not seem to be relenting any time soon.