The news about Microsoft's global advertising force is just a segment of the previously announced 18,000 "reforms" the company intends to make. Don't let the headlines fool you, though. Microsoft is lobbing off a layer in its advertising platform. Job cuts in its advertising arm will total close to 100 jobs, and maybe a little over.
For the software company's marketing and advertising staff, it could be worse.
But why, with companies like Google continuing to diversify, Yahoo trying to make moves, and other tech companies trying to expand their partnerships, would Microsoft decide to close a seemingly necessary division?
It depends on the strategy.
Business Insider suggests that Microsoft may dedicate its resources to its current customers, due to its extremely low advertising growth. It's a strategy that most businesses like to rely on; when getting new customers is tough, businesses should rightly switch to getting current customers to buy more. A customer you have now is truly much more valuable than a prospective customer.
Should outsiders look to these layoffs as a sign that Microsoft is floundering?
No, they shouldn't.
Though it does seem that once a vision is changed, advertising and marketing are affected the most, this move looks like a good one. We're not one to blindly criticize a company for cutting an advertising team. The move must make sense. Based on the limited information that is out there, this move sounds sensible.
But hey, we could be wrong.
As the BI folks said, the story is still developing. But the global ad team is gone, and Microsoft will need a solid strategy to make others realize that they know what they're doing.
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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