Microsoft Layoff Plan: Is 12 Months Too Long?

By Steve Bates Jul 30, 2014
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Staffing experts familiar with Microsoft’s plan to lay off up to 18,000 employees generally agree on one thing: The reduction in force is necessary to make the company more agile and reduce duplication created by the acquisition of phone manufacturer Nokia.

But some experts take issue with the time frame set out by the Redmond, Wash.-based software behemoth: Microsoft will take up to one year to implement the layoffs, leaving many workers in extended professional and emotional limbo.

In announcing the layoff plan July 17, 2014, CEO Satya Nadella said that most of the positions to be eliminated will come from Nokia professional and factory workers, and that the majority of affected employees will be notified within six months. But he also said that despite performing the layoffs “in the most thoughtful and transparent way as possible,” some people won’t find out until a year into the process.

Nadella added that departing employees will receive severance pay and job transition assistance, and that “everyone can expect to be treated with the respect they deserve for their contributions to this company.” Microsoft’s media relations team did not respond to a SHRM Online request for an interview for this article.

Employees in Limbo?

Gerry Crispin, co-founder of Kendall Park, N.J.-based staffing consulting firm CareerXroads, said he believes that “one year is very reasonable” for a layoff at a large company such as Microsoft. “People have to work these things out,” such as determining which skill sets will be needed in the short term and long term, and ensuring that the remaining workforce has those skills.

John Challenger, CEO of Chicago-based outplacement and consulting firm Challenger, Gray & Christmas, observed that conducting a layoff over the course of a year “is hard. It leaves the organization in limbo for an extended period, and it leaves people wondering when the next shoe is going to drop.”

John Sullivan, a professor at San Francisco State University and a talent management thought leader, said that Microsoft “has been leaking this for months,” so many employees were worried about losing their jobs even before the layoff was announced publicly. From the point of view of an employee, for many more months, “You’re going to be at your desk thinking, ‘I hope I don’t get a call from HR’.” As an employer, said Sullivan, “you just don’t want that paranoia.”

Shally Steckerl, president of the Atlanta-based Sourcing Institute, an online courses provider, advises organizations planning layoffs to “do it all at once, be clear and transparent, and tell everyone who needs to know before they find out through the rumor mill.” Doing layoffs slowly “builds up stress and resentment. It also delays the recovery period as remaining staff adjust to their new responsibilities.”

That said, Steckerl believes that Microsoft “did a great job” of announcing the layoff to employees “so that people who were going to be affected did not get a surprise message or find out from a third party.”

While it’s important for those targeted for a layoff to be given financial aid and assistance finding a new job, it’s also important to display soft skills, said Atlanta-based Steve Spires, managing director of outplacement solutions for the BPI Group, a consulting firm. “The remaining employee population will hear it and talk [about whether] their departing colleagues are being treated with dignity and respect.”

Spires said that care must be taken during layoffs to “protect the corporate brand and to sustain engagement with those who aren’t leaving.” He said a layoff must be carried off with the same amount of planning as a major product launch.

Tell It Like It Is

Communication is essential to minimizing disruption throughout the process, staffing experts agree.

“It’s very important for the company to constantly be telling people what they know and what they don’t know” about who will be leaving and when, said Challenger.

If that doesn’t happen, said Crispin, “people will imagine that things are worse than the reality.”

“Telling it like it is is so important,” said Mike Burniston, a senior partner with global consulting firm Mercer in New York. “If you sugarcoat it, the workforce sees right through it.”

“The immediate boss is a key contributor to how these things go,” said Kim E. Ruyle, president of Inventive Talent Consulting in Coral Gables, Fla., and a member of the Society for Human Resource Management’s HR Disciplines Special Expertise Panel. “Employees need to know where the organization is going and the challenges along the way,” he said, adding, “Even in good times, companies don’t do a good job of connecting their strategy to their actions.”

Burniston said that organizations “need to provide a productive mechanism for people to give information back to management.” That can help determine whether employees understand why a layoff is being conducted.

Often, HR has a minor role before a layoff is announced—though in some organizations that is changing, said Spires. “HR can be the architects of change,” he stated. “HR is becoming more involved in the who and the why.”

But implementing layoffs is painful for everyone, and “HR usually bears the brunt of it,” said Ruyle. “HR gets overwhelmed dealing with all of the fallout” and often becomes mired in tactical details instead of thinking strategically.

Experts say there are many factors that can undermine a layoff process, including using longevity as the main criterion, failing to apply objective metrics or skills assessments, and exempting managers or headquarters staff.

Noted Spires: “If it’s not done well, the impact will last for years.”

Steve Bates is a freelance writer based in the Washington, D.C., area and a former writer and editor for SHRM.​​​

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