Layoffs cool Microsoft employees' opinion of CEO Satya Nadella

Percentage of former and current workers who approve of CEO dropped by 24 percent, those who disapprove quadrupled, after big layoffs hit

Although Microsoft CEO Satya Nadella's approval rating before the company's biggest-ever layoff was high enough to place him in the top 30 of U.S. chief executives, the percentage of employees, both current and former, who say they approve of him as the firm's leader has dropped since the job cuts.

Nadella announced the layoffs on July 17, when he said that the Redmond, Wash. technology giant would shed 18,000 jobs in the next year, two-thirds of the cuts coming from the Nokia mobile phone division that Microsoft acquired this year for $7.2 billion.

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About 5,500 of the proposed job cuts, however, are to come from non-Nokia personnel, with at least 1,400 of those from the Seattle area and elsewhere in the state.

Glassdoor, a Sausalito, Calif.-based online jobs and careers website, had pegged Nadella's approval rating at 88 percent for the five months since he took the CEO job on Feb. 4. That approval rating, based on nearly 600 reviews by current and former employees on the website, was well above the average Glassdoor CEO approval rating of 69 percent, the company said in response to questions.

At 88 percent, Nadella would have placed in the top 30 of the 2013-2014 list that Glassdoor published in March, when it unveiled its annual ranking of U.S. CEOs. In that list, Apple CEO Tim Cook was No. 18 with a 92 percent approval rating, while other technology chief executives -- Qualcomm's Paul Jacobs (No. 5), Intuit's Brad Smith (No. 7), Facebook's Mark Zuckerberg (No. 10), Google's Larry Page (No. 11) and Salesforce.com's Marc Benioff (No. 13) -- came in even higher.

Nadella's approval rating was a stratospheric 96 percent, according to data Glassdoor provided to Geekwire a day after the July 17 layoffs. At that level, Nadella would have been No. 4 on last year's list.

However, Glassdoor said it's too soon to assign a post-layoff approval rating for Nadella. "It's still a little too early to tell how much his approval rating has been affected [by the layoffs]," a Glassdoor representative said in a July 24 email. Glassdoor promised to revisit the topic later.

Instead, Glassdoor suggested that Computerworld peruse the individual reviews that current and former Microsoft employees posted to the website since the job cuts.

Which is what Computerworld did, tallying the numbers of former and current Microsoft employees who posted a review during the eight-day stretch from July 17 to July 24, then comparing their opinions on Nadella to those of the former and current employees who added a review in the eight days before the layoffs, or from July 9 to July 16, inclusive.

While the results were far from scientific -- the sampling was self-selected and there was no way to tell when a worker switched from current to former -- they were certainly interesting.

During the July 17-24 post-layoff period, 53 people purporting to be current or former Microsoft employees published a company review to Glassdoor, the majority of them (64 percent) still working for the firm.

In the eight days before that (July 9-16), 34 people posted to Glassdoor, with almost the same percentage (62 percent) identifying themselves as current employees of Microsoft.

The two groups, pre- and post-layoff, however, had differing opinions of Nadella when asked whether they approved or disapproved of his performance.

Before the job cuts, 62 percent of the Microsoft current or former workers said they approved of Nadella, while just 3 percent said they disapproved and 27 percent answered with the politic "no opinion."

After the layoffs were announced, the mood changed. In the eight days following the cuts, 47 percent said they approved of Nadella, 13 percent said they disapproved, and 32 percent claimed they had no opinion. (The figures do not total 100 percent because not all who posted a review on Glassdoor provided an answer on the CEO question.)

Since Microsoft announced its largest-ever layoffs, the percentage of former and current employees who approved of Satya Nadella as CEO fell on Glassdoor, while the percentage who disapproved grew. (Data: Glassdoor.)

The 15-point drop of those who approved of Nadella represented a decline of 24 percent, while the 10-point increase in those who disapproved translated into a huge 333 percent gain.

The increase in the percentage who disapproved was not surprising. After all, one would assume former employees would be angry at Nadella for laying them off. However, that wasn't necessarily the case. Although the percentage of former employees who disapproved post-layoff was 11 percent, the percentage of current employees who disapproved was even higher, at 15 percent. Both groups saw an increase in the percentages of those who disapproved after the layoffs.

At the same time, the percentages of both former and current workers who approved of Nadella went down: The share of "approve" among former employees dropped from 43 percent before the layoffs to 21 percent after; among current workers, "approve" also fell, albeit less sharply, from 71 percent before the job cuts to 62 percent after.

Those changes showed that the experts were right: Layoffs affect everyone at a company, not just those shown the door. And uncertainty can psychologically cripple those who remain when layoffs are extended over a long period. Microsoft has said that about 5,000 of the 18,000 jobs to be cut won't be identified until as late as next June.

Even more fascinating were the comments employees wrote in their reviews of Microsoft as an organization and when asked to give advice to senior management.

Some of the most scathing commentary came from those still working at Microsoft.

"The recent layoff was insane for a company that IS PROFITABLE," wrote a self-identified senior program manager on Thursday. "Becoming even more profitable by dismissing people does not look good."

"Where are you going to invest, in the people that do the work for you or shipping features and services?" asked another senior program manager on July 22.

"Don't lay off any more [people]. We join[ed] Microsoft because we have trust in this company. The day you announced the news, I was immediately thinking about quitting," confided a still-employed senior software development engineer on July 18, a day after the layoffs and the day when Glassdoor recorded more new reviews than any other day in the July 9-July 24 period.

But the layoffs did not seem to leave a bad taste among those who said they were no longer with Microsoft. In comments added to Glassdoor after the job cuts, 73.7 percent of those identified as former employees said they would recommend the company to a friend, while only 15.8 percent said they would not.

Naturally, not every former employee was happy. "Too much politics. The people you work with will be smart; but good luck finding good people," wrote an ex-program manager after the layoffs. "I'm not optimistic about the outlook for this company."

Nadella has promised to shake up the company's culture -- "Nothing is off the table," he wrote in a 3,100-word memorandum sent to employees the week before the layoffs -- to flatten the organization by eliminating some middle management, and to focus on productivity and platforms.

A majority of those on Glassdoor were optimistic about the future, at least prior to the layoffs. Of more than 400 reviews of Microsoft added to the site from April 18 to July 17, 52 percent believed business performance would improve, Glassdoor said. Of the remainder, 39 percent thought it would stay the same, and only 9 percent said it would worsen.

If Nadella is able to make good on his promises, even after the layoffs, he has the support of some current employees who took to Glassdoor.

"Frustrating politics and indecisive management can make things rough," said a senior program manager. "Lots of work left to do to change the engineering culture to modern standards, but I think Satya is up to the challenge."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

Read more about IT leadership in Computerworld's IT Leadership Topic Center.

This story, "Layoffs cool Microsoft employees' opinion of CEO Satya Nadella" was originally published by Computerworld.

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