Microsoft dismantles Nokia Devices and Services buyout firing 7800 employees

The cuts come in addition to 18,000 layoffs announced a year ago: Those cuts included around half of the 25,000 staff who joined Microsoft from Nokia.

Microsoft’s wakeup call: Antony Currie and Robert Cyran discuss the software giant’s $7.6 billion writedown on last year’s Nokia acquisition and explain what it means for boss Satya Nadella.

The layoffs and financial charges will take place over the next few months and finish by the end of this fiscal year, Microsoft noted.

Wall Street seems to prefer Nadella’s strategy of focusing on software and Internet services. The ex- CEO of Microsoft, Ballmer even effectively banned the usage of iPads from the National Basteball Association team.

Shares rose 41 cents to $44.71 in morning trading.

Most of the job cuts will be in the phone business, the company stated. Microsoft Corporation (NASDAQ:MSFT) would not have been able to make a significant stand in the mobile device arena were it not for this deal.

However, the company would not stop manufacturing smartphones.

“It’s a headache that Nadella inherited”, said Daniel Ives, an analyst at FBR Capital Markets. Instead, Windows phones will become part of the overall Windows 10 ecosystem that includes tablets and desktop computers as well as laptops and other devices that can run Windows. His focus, however, is on driving mobile efforts in the near term while prioritizing reinvention.

Making apps like business software Office and personal digital assistant Cortana for a range of devices is clearly where Microsoft wants to go, Jack Narcotta, an analyst with Technology Business Research, told IBD.

The reduction in the employees will primarily be made in the phone industry.

After taking into account restructure charges, the company has now depreciated more than entire cost of acquiring Nokia. In 2014, Microsoft also announced its plans to lay off 18,000 employees.

Steven A. Ballmer, Microsoft’s CEO said, at the time when Microsoft purchased Nokia’s mobile phone business, that the deal was a daring step into the future. The cuts represents about 7% of its staff.

The company also followed up with a statement that the restructuring process will result in job losses for 7,800 employees, especially from the mobile device business.