Microsoft's weak results this quarter have led the company to its first-ever major workforce reduction.
Layoffs are never a good thing, especially for a bellwether tech company like Microsoft. And generally, when a company grows beyond 10,000 employees (let alone 100,000), there are always staff reductions that can be made that have minimal effect on the overall revenues.
But the crux of Microsoft's problem wasn't people; it was the insistence that Windows Vista was better than XP, and the long-term denial of customer and analyst comments illustrating the fact that Vista was not great.
"Windows Vista didn't do well. Based on our data, a lot of clients are skipping Windows Vista," said Neil McDonald, an analyst at Gartner. Indeed, nearly every other major analyst firm found a similar lack of Vista adoption, with Forrester Research likening the (operating system) to the failed New Coke.
Microsoft did too little, too late, during the entire Vista launch and its continuing debacle to make customers want the new operating system and to allay the concerns of the analyst community. Vista's biggest problem is still Windows XP, and Microsoft kept its head in the sand for way too long.