Microsoft (NASDAQ:MSFT) announced plans to lay off some 18,000 workers, or 14% of staff, last week. Nokia will suffer the brunt of the cuts, but who else loses? Guest host Alison Southwick put this question to Fool analysts Nathan Alderman and Tim Beyers in this week's episode of 1-Up on Wall Street, The Motley Fool's Web show in which we talk about the big-money names behind your favorite technology, movies, toys, video games, comics, and more.
In an email memo, CEO Satya Nadella promised to start cutting immediately and expects that most of those who'll be moving on will know within six months. "My promise to you is that we will go through this process in the most thoughtful and transparent way possible," he wrote.
Nathan says the move, while painful, is a reflection of the situation in which Microsoft finds itself. Surface tablets haven't sold nearly as well as the company hoped, and Windows Phone badly lags Android and iOS. Not exactly what you want to see from a company that expects to be profiting from a "mobile-first" future. Eliminating distractions should help.
Tim agrees, noting that Nadella's boldness suggests that he understands that incremental change is no longer an option for Mr. Softy. Sweeping change has to be the norm, and it needs to come fast. Putting Office front and center -- and then building a multi-platform ecosystem to support it -- appears to be the priority. A wider war with Google (NASDAQ:GOOGL)(NASDAQ:GOOG) would almost certainly follow, Tim says.
Now it's your turn to weigh in. How do you rate Microsoft stock right now? Click the video to watch Alison put Nathan and Tim on the spot, and then leave your take in the comments box below. You can also follow us on Twitter for more segments and regular geek news updates!
Alison Southwick has no position in any stocks mentioned. Nathan Alderman owns shares of Apple. Tim Beyers owns shares of Apple and Google (A and C class). The Motley Fool recommends Apple and Google (A and C shares) and owns shares of Apple, Google (A and C class), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.