Satya Nadella cuts Microsoft jobs: turnaround or beginning of end?

Microsoft CEO Satya Nadella is officially swinging the axe, and while it’s not entirely clear just who at the company it’ll hit, the end is clearly near for at least some of the company’s employees. In a sweeping company-wide memo, Nadella laid out his vision for Microsoft’s future – and while he largely aligns himself with the mobile-at-all-costs philosophy of his predecessor Steve Ballmer, he makes clear that he has a different and more frugal path for getting in there. In other words, layoffs are coming. Lots of them. Is this Nadella’s first, coldest, most necessary move in his attempt at a turnaround bid, or is the downsizing of Microsoft the beginning of the end of the company as we know it?

The answers will become more clear once it’s revealed just which divisions the layoffs will hit the hardest. Windows 9 will still happen for the desktop, but how many people will still be working on it by the time Satya Nadella gets done swinging that proverbial axe? The Surface tablet and WP8 smartphone have been a commercial failure by any objective standard, and particularly by Microsoft’s ambitious and well funded standards. But will those teams remain intact in the hopes that they can finally figure out how to crack the mainstream, or will they be gutted in favor of new smartphone and tablet projects that are built from scratch?

These are the answers we don’t have yet, and won’t until the layoffs actually happen. But the significant reduction in headcount means that Nadella is either trying to make the company more nimble for a focused attack in the tech markets that still matter, or he’s expecting Microsoft to fall on hard times and is reducing costs now accordingly.

Those looking for a guide map may be inclined to revisit Steve Jobs’ return to a sprawling, unfocused, revenue-hemorrhaging Apple in the mid nineties. His first step was to eliminate every product, project, and person who wasn’t relevant to his core goals. Only then did he get around to delivering entirely new products and technologies which put the company at the forefront of the market. Satya Nadella is showing today that he’s willing and able to take care of that first, ugly part. Which divisions he leaves intact will tell the tale of how Microsoft will proceed from there.