Microsoft announces 7,800 job cuts across phone division

While some of Microsoft’s 1,200 Irish employs are engaged in mobile-related activities, the company’s sales, operations and software development is not expected to come in for attention with regard to the new job cuts, according to sources close to the company. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility”.

Microsoft had agreed to buy Nokia’s handset unit in September 2013, weeks after Ballmer announced he would retire within the year, and the deal was completed in April 2014, two months after Nadella became the CEO.

But Microsoft’s Windows Phone system has gained little traction against Apple’s iPhone and Google’s Android system. The mail spoke of the strategies that were being undertaken at Microsoft to grow a phone business that can be sufficient for it.

The email goes on to say that the company has also written off around $7.6 million, spent acquiring Nokia’s Devices and Services division.

Industry analysts are also speculating a shift towards cloud computing including Microsoft’s Office software suite, rather than a targeted mobile hardware strategy.

More bad news for Microsoft.

The move is a clear acknowledgment that the deal was a multibillion-dollar strategic blunder by Ballmer, who had envisioned it as a way to make Microsoft more competitive in the mobile market dominated by Apple, Google and Samsung.

Microsoft CEO Satya Nadella stated that the company is revaluing its smartphone business, but he didn’t reveal any details regarding that.

Rather than catering to all smartphone shoppers, Microsoft said it would narrow its focus to three types of customers: business users who want strong management, security and productivity apps; buyers at the low end of the market looking for affordable phones; and Windows fans. The software giant had more than 118,000 employees worldwide at the end of March.

Nadella in his email also added that the company has written down the value of the phone business acquired from Nokia, “We announced a fundamental restructuring of our phone business”. The company’s employee strength in India could not be ascertained.

The company announced last month that Stephen Elop, the ex- top boss at Nokia, would leave.