Microsoft is conducting the biggest round of layoffs in the history of the company, and has just made its global advertising sales team redundant. The team was responsible for selling ads across several Microsoft properties, including on the Bing search engine. Satya Nadella, Microsoft CEO, has plans to cut 18,000 jobs, just under one seventh of the work force, before the end of the fiscal year. The latest round of cuts saw more than 2,000 people made redundant. Several dozen advertising positions were among the cuts. Microsoft has referred to the cuts as the simple trimming of the division, but analysts at Business Insider have called it the firing of the entire division and speculates that the cuts are much deeper than have been reported, predicting that the majority of the global sales force will soon be leaving.
Is Microsoft Leaving Advertising?
There is some speculation that Microsoft wants to get out of the online advertising business. They have been cutting back on their ad operations for quite a while, having sold off the Atlas ad server to Facebook in 2013, but their recent behaviour suggests otherwise. The company brought Bob Bejan, formerly of MSN, back to the fold in September, and Bejan has a strong online advertising pedigree. Microsoft’s behaviour is inconsistent. The company is on track to surpass Yahoo in the online advertising space if it does develop its advertising business, but even if it were to exceed Yahoo’s 2.54 percent share that is a far cry from the 31.45 percent that Google enjoys. Microsoft may be heading down a more hardware-centric route, leaving search ads and display ads to the specialists. Alternatively, the company could be planning to run the ads side of the business on a skeleton staff, focusing on Bing and one or two other core properties and ignoring MSN, Outlook, Xbox, Skype and Windows 8 – all of which are currently serviced by the ads section of the business.
Cutts Still Away From Google
While Microsoft is cutting its advertising team, Google is still short one particularly prominent figure. Matt Cutts, widely regarded as the face of search, has just extended his leave from Google until 2015. Cutts made the decision to take some time off from July 2014, for personal reasons, and has just announced that he is happy with the way that the webspam teams are performing during his absence, so he has extended his sabbatical.