Employee Turnover Means Rocky Road Ahead for Microsoft

The latest shuttering of Microsoft’s Skype office in the London led us to explore the impact of employee turnover for the tech giant. Microsoft reduced its workforce consistently for the last two years and has already announced future plans to lay off around 2,850 employees, as noted in SocialBarrel.

Microsoft and Employee Turnover

These challenging workforce experiences have the potential to shake up the competitive position of Microsoft, as is the case for many large companies who go through a string of such acquisitions. Here are three reasons why.

History of Merger Disappointment

For the tech giants, business combinations typically present great advancements and enormous challenges. On the talent side, managing employee morale through a merger or acquisition can be daunting. Powerlessness in the face of abrupt changes and anxiety become contagious. As the Harvard Business Review estimates the merger failure rate to be somewhere between 70% and 90%, often downsizing is inevitable.

For Microsoft, the vision is often admirable, the task was always integrating (and monetizing) the long list of far-reaching acquisitions (see Yammer, aQuantive, Nokia, and Farecast). And they have hardly begun the largest of them all: LinkedIn.

Highly Competitive Technology Talent Market

In a few ways, tech acquisitions today are different. With low sector unemployment, and high demand, it is unlikely that skilled IT employees are losing sleep over losing their jobs. They also won’t wait around for it. IT employees realize their value in today’s market, especially those with the best certifications. To quote Chason Hecht, employee retention expert and President of Retensa, “Whoever has the best talent wins.” Microsoft-trained employees who find their ways to the ranks of their competitors bodes well for industry rivals such as Apple (AAPL), Google (GOOG), IBM (IBM), and Oracle (ORCL).

Communication Challenges

Globalization can bring a litany of communication breakdowns. With such a diverse workforce, how does Microsoft motivate across the enterprise? Rapid changes at a company make it hard for employees to know what to expect or even who they report to. Successful companies actively remove information silos. By fostering an atmosphere of collaboration, organizations may increase their productivity.

Does this sound like the state of your organization?

Large companies have the benefit of historical data, as well as an extensive network of employees from which powerful insight can be gathered. Retensa collects diagnostic information to map your firms Employee Life Cycle in order to find, target, reduce and predict turnover. Contact requests@retensa.com to hear more about how we can help manage employee turnover at your company.


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