Microsoft Makes Changes to Hardware Portfolio Amid Layoffs

If you’ve been following our story on Microsoft laying off 10,000 workers in their engineering department, you know that they had previously let go of staff in the consulting, customer, and partner solutions departments.  The Tech giant has found itself struggling to maintain and keep its workers after the effects caused by the pandemic. Laying off employees has been the only way Microsoft has seen it best to save on revenue. 

The layoff is likely to affect 5% of its employees, as Microsoft employs about 220,000 people. This announcement came when Microsoft had just implemented its unlimited time off policy. As promised, I’ll be giving you more information on the latest news on these layoffs. 

Amidst all this, Microsoft also announced that it would be making some changes to its hardware portfolio. 

Microsoft CEO Satya Nadella said that Microsoft would continue to invest for the future in strategic areas, such as that in secular growth and long-term competitiveness. This would mean that some areas will have to be either eliminated or downsized. On that note, $1.2 billion dollars from Q2 for severance costs were to be allocated to changes in the hardware portfolio. 

Nadella did not give any further information, but I went out there and found that the platform shifts are talking.  Microsoft has a range of hardware that includes PC accessories,  Hololens headsets, and so much more. 

There has been a deterioration in the PC market after the spikes in laptop sales during the pandemic due to remote work. Microsoft struggled with the Hololens hardware during that time. In October, Microsoft put together all its hardware devices revenue into an earnings report. They saw that the devices’ Revenue had increased by 2%. Microsoft then further issued a warning that the next report due in February would have a 30% device revenue drop. 

Together with its device revenue drop, Microsoft forecasted that the OEM Revenue would decline by 30%. And according to Nadella, this means there could be a divestment due. 

Microsoft might also be scrapping plans for the Hololens 3, although this hasn’t been made clear as they reported that an update would be given on the hardware when the time is right. This comes at a time when Hololens boss Alex Kipman departed from the company after some allegations of misconduct. With Congress refusing the army’s request for 6900 headsets that work based on Hololens technology, Bloomberg reported that the job cuts have hit the most in The Hololens Division.

Apart From Hololens, Microsoft is likely to be looking at its Surface lineup. Its Surface Hub 2  was designed for the future office, and the launch was quickly canceled due to the pandemic. The cancellation also affected Windows 10X devices such as the Surface Neo.

Rumors also suggest that Microsoft has scrapped any plans that included the dual screens Surface Duo 3. The design is likely to be changed, and there’s a likelihood that we won’t see a traditional surface phone. 

Reportedly Microsoft isn’t the only company having cuts in hardware or laying off workers. Amazon also cut jobs in its services and devices division last year.