Ballmer’s Nokia obsession turns sour for Microsoft

Microsoft announced that it will layoff 7,800 employees as it looks to expand the reach of the Bing search engine.

The company’s job cuts in smartphones comes as Nadella, who became CEO past year, had initially opposed the Nokia acquisition made in the last months of his predecessor Steve Ballmer.

Microsoft plans to layoff about 8,000 workers, majorly from Nokia’s Devices and Services division which it acquired in 2014.

“I am committed to our first-party devices, including phones”, Mr. Nadella wrote in an email to his employees.

Other recent moves by Microsoft include handing off some its digital advertising business to AOL and selling its street-image mapping operation to Uber.

The vendor also said it will take a $750 million to $850 million restructuring charge to reorganize its handset business. “Microsoft needed to update its operating system and get into mobile”. It will bring many innovations to the OS, including a new browser, and Cortana, the virtual assistant.

Last month, the company had announced that Stephen Elop, the ex- top boss at Nokia, would leave. Now Microsoft controls 96.7% of the Windows Phone market, this is something Nadella do not want, since Microsoft does not literally control any hardware market.

Nadella does explicitly refer to flagship devices, saying that the company tends to limit its focus to three consumer segments (value, business, and flagship phones). Windows-based phones stood at third spot with market share of 2.7 percent.

The cuts indicate that Microsoft will likely focus its mobile efforts on its high-stakes Windows 10 software release, due in late July, rather than on developing smartphones, analysts said.

Last year, Microsoft cut down 18,000 positions from its 118,000-member work force around the world. Microsoft ultimately wanted to build an ecosystem that created customers that were loyal to a slew of its products, much as Apple and Google have done so successfully.

Around 7 per cent of the workforce will be cut mainly in the phone hardware business, emphasizing the company’s shift in focus to software and cloud from hardware. He also mentioned the company’s plan to harness an effective short-term mobile phone portfolio to strengthen the long-term reinvention in mobility.