The move was organized by then CEO Steve Ballmer and, like many of Ballmer’s ideas (Windows Vista, Windows 8.x) it has not gone over well. One of the last items that Ballmer managed to slip in before departing was the purchase of Nokia’s handset business. This purchase was intended to give Microsoft the ability to manufacture their own tablets and phones without the need to outsource to companies like Foxconn or Pegatron.

The purchase also created several overlapping departments and pushed the number of employees well past the 100k mark. Nadella now has the unenvious task of cleaning that mess up. The current rumors are that he will be cutting as much as 10% of the staff at Microsoft and also performing another reorganization to keep things clean and flexible.

One of the areas that Nadella will be looking to trim back is in the marketing departments, but there are also planned cuts in engineering and even a rumor of cuts in R&D and some new projects. If the rumblings are true then this will be the largest staff cuts since 2009 when Ballmer cut around 5% of Microsoft’s staff.

It will be interesting to see what Microsoft looks like when Nadella is done. Will he completely reverse the changes made by Ballmer only a year or so ago? Or will he refine those changes and further bend Microsoft toward the devices and services company that Ballmer envisioned? We have a feeling that Nadella will try to split the middle, which might not be the best thing for Microsoft at this point.

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