So Microsoft has finished the last of its rounds of planned layoffs in its restructuring effort, 18,000 employees in total, about 14% of Microsoft’s workforce. The planned layoffs were announced last year after Microsoft acquired Nokia and the cuts apply mostly to Nokia factory workers as well as Microsoft IT staff. Microsoft CEO, Satya Nadella, justified the layoffs as “…flattening organizations and increasing the span of control of people managers. In addition, our business processes and support models will be more lean and efficient with greater trust between teams. The overall result of these changes will be more productive, impactful teams across Microsoft”.
A few things:
First of all, layoffs and Lean do not go hand in hand. In fact, they are opposed to each other. Lean has nothing to do with the physical size or scope of a company and everything to do with how processes are structured. Companies with 10,000 employees can be just as Lean as companies with 100 employees if they’re managing their processes in the same way; the inverse can be true too, a company with 100 employees is not inherently more Lean than a company of 10,000 if their processes are just as screwed up. So here, claiming that this is an effort to ‘become more Lean’ is just more corporate nonsense with buzzwords. Lean companies don’t lay people off, they find places for those employees. Really Microsoft? You want to realign and grow your business but can’t do it with 18,000 already trained, on-hand employees that you’ve already invested in? One analyst even claimed, “[Microsoft is] taking an aggressive and activist posture to reshaping its organization along the lines that Satya has talked about … What we’re looking at is a company cutting not out of weakness but a desire to reshape itself”.
“…taking an aggressive and activist posture…”
“…cutting not out of weakness but a desire to reshape itself…”
Sure thing Merv…
I’m sure many of you have heard my dad say something along the lines of, “I’ve never heard of a company cutting its way to success”. That applies to Microsoft too. Why is that? Well, that brings me to my second point:
“…increasing the span of control of people managers” and “…greater trust between teams. The overall result of these changes will be more productive, impactful teams across Microsoft”. I don’t know about you but I’m not going to be particularly trusting, productive or impactful if the possibility of being swept up in another mass layoff is always on my mind, especially if I’m working under increasingly controlling managers.
So Microsoft literally decimated its workforce in an effort to become a better company. Let us how that works out for you, Microsoft.
Now, on the other hand, Zappos is taking a completely different approach to its restructuring. The shoe company, already famous for how it engages its employees, wants to get away from the traditional management style and wants all of its employees to be onboard, but realizing that not everyone might be onboard with the change they’ve reached out to their employees and thoroughly explained the rationale and plan for restructuring. Zappos CEO, Tony Hsieh, sent out, basically, a novella to his employees outlining his goal and explaining the concepts behind ‘holacracy’ and has asked employees who have doubts about the change to read a book and watch a video describing the new management approach before making a decision to leave the company. Employees who still don’t think that the new way will be for them are offered 3 months of salary and benefits reimbursement if they choose to leave the company. But the goal is to keep everyone on board. John Bunch, who describes himself as the technical advisor to the CEO at Zappos, says, “Our goal is certainly that everybody figures out how to contribute and how to help the organization.” and doesn’t expect any layoffs from the change.
So there you have it, two companies looking to restructure and realign themselves with two completely different approaches. One slashing and burning and forcing itself into change and one engaging its employees and looking to transform itself into what it wants to be with willing employees looking forward to what’s ahead.
Which company would you rather work for? Which company would you rather manage?