Satya Nadella has indicated numerous times that he would remake Microsoft into a faster moving company that embraced modern computing trends. But this week's changes are as old as corporate America: The firm will undertake its previously-announced second round of layoffs and is making major changes to its board of directors.
The timing of the second round of layoffs was first revealed by my Windows Weekly cohost Mary Jo Foley, and I've since corroborated this new, albeit with only one source at the software giant. Microsoft said in July that it would lay off about 18,000 employees, including 12,500 of the 25,000 people who came to the firm as part of the Nokia acquisition. The first wave of such cuts happened in July. But the second wave begins this Thursday.
It's not clear how many people will be let go this time—the first wave of cuts was deep, with 13,000 employees impacted—but Foley reports that the cuts will span across almost every product group at the company. As a result of these layoffs, Microsoft will incur pre-tax charges of $1.1 billion to $1.6 billion for severance and related costs over the course of its current fiscal year.
Separately, Microsoft announced some major changes to its board of directors.
Dave Marquardt and Dina Dublon will retire from Microsoft's board at the end of the year, while Teri List-Stoll of Kraft and Charles W. Scharf of Visa will join the board on October 1. "These additions help strengthen our ability to serve our shareholders and work with Satya and the company's senior leadership team on Microsoft's ongoing transformation," Microsoft chairman John Thompson said in a prepared statement.
Mr. Marquardt goes way back with Microsoft, and has served the board in various capacities since 1981. Mrs. Dublon joined the Microsoft board in 2005. Both are from the financial industry. But with their exits, we can see how even Microsoft's board has "transformed"—as the company puts it—in the past several months: Now, six of Microsoft's board members have joined since 2012.
Microsoft also announced a 10.7 percent increase in its quarterly dividend to 31 cents a share. This isn't particularly radical and represents the smallest change to the dividend since 2009.
