Well, let's look at it more closely. If he'd announced a massive general layoff at all levels due to falling profitability, I'd agree that it's a sign the company has one foot in the grave.
But really, a little more than 2/3rds of the layoffs are redundant positions taken on in a recent acquisition. Layoffs are always sure to follow in large acquisitions like this. The remaining third is targeted at MS itself to reduce the layers of management that they've accumulated (i.e further reducing redundancies)
MS was also heavily panned as a company from a financial perspective for piled on bureaucracy, redtape, and piling resources into dead-ends. Under that light, wouldn't it make sense for MS to reduce bureaucracy, red tape, and dead weight?
Really, at this point, the only thing this CEO is known for is announcing a restructuring of MS that has been called for, for some time now.
If he had fired core personnel from the profitable branches of the business, then he'd be hurting the company in the long term for short-term savings. But in THIS case, he's getting rid of redundancies that are hurting the company in the short-term AND in the long-term.
Today, MS is seen as simply a dividend stock with strong profits but little growth to look forward to. But they have a considerable cash balance and they're increasing cash flow from the layoffs. Cash allows a company to try things, and to change things, and so long as they've got the cash for it, there's still the possibility for them to put the cash into a successful venture. 6 months in, it's too early to determine whether this new CEO has found such a venture, it's also too early to write him off.
In the meantime, I hope these employees will get decent severance, and hopefully an even better job elsewhere at a company that needs their skills. There's no sugarcoating it, there is an immense human cost to putting 18,000 people out of work, that will likely affect many more lives than just the 18,000 employees.