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News Tip: Microsoft Layoffs Offer Multiple Benefits Amid Concerns, Expert Says

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The tech giant announced Thursday it will lay off 18,000 employees in the next year. John JosephAssistant professor, The Fuqua School of Business, Duke Universityjohn.e.joseph@duke.edu

An expert in corporate strategy, innovation and new product development in mobile devices, Joseph has held managerial positions in the technology, pharmaceutical and nonprofit sectors. Quote:“Slashing the bureaucracy of a large organization has multiple benefits. First, it improves the speed of decision-making. Senior managers are closer to the action, decisions can be implemented more rapidly, and it increases the reliability of communication." “Second, it offers both short-term and long-term cost-savings to give the firm a more competitive cost structure. This will be increasingly important for Microsoft as the share of revenue and profits from non-operating system product lines grow."

"There are concerns with such moves, however. It's easy for organizations, during major change efforts, to become too internally focused. Microsoft CEO Satya Nadella is looking to focus the company and chart a future around the firm’s core strengths, including platforms and software. To do so, he will need to keep an eye on the competitive environment and quickly seize new opportunities."

"Amidst the confusion which often follows such structural change, he will need to keep morale up and ensure he continues to build bench strength at all levels of the company.”

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