Does anybody know what Microsoft is up to?

Microsoft has just announced the largest layoff in its history: 18,000 employees, or 15% of its total workforce, a move required to cover the losses generated by its purchase of Nokia. As many as 12,500 of those sacked worked for Nokia, which casts doubts over Stephen Elop’s management of the Finnish company: since September 2010, when he replaced Olli-Pekka Kallasvuo, Elop has sent 50,000 people home, as well as closing down platforms such as Symbian, Meego, s40, s30, along with Asha and Nokia X. Impressive stuff.

Microsoft, which in June had a workforce of 127,104 people (as a point of comparison, Apple: 80,000, Amazon: 124,600, IBM: 431,212, Red Hat: 5,000+, Facebook: 6,800, Google: 52,000, Intel: 104,900), this latest cutback raises doubts about what size company it wants to be as it undergoes a major strategic reorientation: is this latest cutback an indication that Microsoft will be pulling out of the hardware market?

The decision to shut down Nokia X, the product line based on Android that was trumpeted at the Mobile World Congress in Barcelona in February, raises more doubts about the company: it closes a product line after four months that was supposed to be competing in the low-price segment, at the same time as trying to compete with its own Lumia models, which not so long ago were supposed to be in the upper range. According to some analysts, the Nokia X models were lacking identity: which is normal… it logically takes longer than four months to develop an identity.

This is a strategic moment for the smartphone market, which Android currently controls 80 percent of, making up 44% of the total cellphone segment. At such a time, any reasonably viable alternative for users would be welcome: monoculture is not a good thing for anybody. Creating doubts about its phones, cancelling recently opened product lines, or condemning those who buy to owning a something that is obsolete after just three months doesn’t seem like the best strategy for generating confidence, and less so in markets in which the purchase of a smartphone represents a major investment for most people, and one that is typically the outcome of considerable research. A change in management will often be reflected by changes to a company’s strategy, something that is reasonable and often advisable. But the tremors emanating from Redmond in recent days are quite another thing, and cause for concern.

(En español, aquí)