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Microsoft sharpening axe for marketing heads - report

Hundreds of jobs at stake in cultural revolution, say sources

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The weak shall succumb

But what are the chances of a Sinofsky cultural revolution sweeping the bureaucratic body of Microsoft this or any other time? It may come down to how much success and sway those running Microsoft's other product groups claim. One such person is Sataya Nadella, server and tools group president appointed after veteran Bob Muglia's exit in the wake of a 2010 clash with chief executive Steve Ballmer over monetising Azure.

Nadella is considered a strong and consistent performer while S&T has a good track record of delivery, but other groups are not so proud. These include Microsoft's online services division and Windows Phone, which have struggled. Online continues to make a loss under former Yahoo! engineering genius Qi Lu, and Andy Lees was recently shuffled out of his leadership of Windows Phone last year after Microsoft's share of mobile had declined.

Another former senior Microsoft exec who wished to remain anonymous predicted the Sinofsky method will crash over other parts of Microsoft – whether it's needed or not.

"It's only a matter of time that that culture permeates, whether Steven drives it or not, because of the constant culture of engineering talent; every two years you are looking for a new role," the ex-exec told The Reg. "In the last two years, from what I observed from people in server and tools, Windows is the place to be."

This will be helped by the fact the blood at the GM and corporate vice president level is being diluted in the lower ranks by an intake of younger talent that should, over time, move up.

A former Microsoft exec tells us Microsoft had made it a criterion of their annual review to recruit a set number of students straight out of college. He reckons Microsoft last year let go the bottom 10 to 20 per cent of its staff, kept the top 20 per cent and made life "uncomfortable" for the 60 per cent in between. "The plan is to hire in people fresh out of college to get new talent and make Microsoft cool again. It's pretty broad within the company," he says.

A compacting of operations would potentially help Microsoft save money – a big priority since the economy went south, with cuts falling heavily on marketing. Marketing is a fatted cow: former CMG group chief Mich Mathews ran a budget of $1bn across Windows, Bing, Xbox and more. Microsoft spent $13.9bn on sales and marketing in fiscal 2011.

Money gets nothing

Yet, time and again, on awareness at least, Microsoft's brand scores lower than the likes of Apple and Google in surveys of consumer awareness. Now times are even tighter, with sales of PCs – which are responsible for more than $14bn worth of business – stumbling. The sacred cow's finding its pasture reduced.

It is uncertain whether the coming CMG change Bloomberg reports will unleash a Sinofsky revolution on Redmond. A change is certainly coming, however. Whatever happens in the next few weeks, it's significant that the person leading the CMG makeover himself is a newbie: senior vice president Capossela might have worked at Microsoft for 20 years but he spent it mostly in the Office team. Mathews, who was in the role before Capossela took over in April 2011, had joined Redmond 22 years previously to lead the PR team, and had spent her time in communications. ®

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