Cuts Coming to Microsoft?

That’s what some analysts are saying after reading CEO Satya Nadella’s big new memo:

“Nothing is off the table in how we think about shifting our culture to deliver on this core strategy,” Nadella wrote. “Organizations will change. Mergers and acquisitions will occur. Job responsibilities will evolve. New partnerships will be formed.”

Many analysts put a spotlight on those lines, and others in the same paragraph, to conclude that headcount cuts are coming.

“The focused mission Nadella articulated does not need 130,000 people. Period. There are absolutely cuts coming, and they are likely to be brutal,” said Ben Thompson, an independent analyst who covers technology on his Stratechery website (paid subscription required for Thompson’s analysis).

There’s no doubt left in my mind that Nadella is a serious CEO with big ambitions on where to take the company. The fact that this memo went public indicates that either Gates & Ballmer approve of Nadella’s ambitions, or that someone is attempting to sideline them. Either would be good news for the company.