Microsoft hangs up on Nokia business, to cut 7800 jobs

Creative Strategies analyst, Ben Bajarin said narrowing the focus on mobile will allow the company to devote its resources to its strongest areas like software and cloud development, noting that the company has served mobile phone customers ranging from low end to premium tier. He added that the company intends to shift from a strategy to create a standalone business towards creating and developing a live windows ecosystem incorporating their first-part device family.

Nadella went on to say they would run a more focused phone portfolio for the time being while “retaining capability for long-term reinvention in mobility”.

The layoffs will primarily come in the phone unit, but won’t be limited to that business and will be carried out over the next several months, Chief Executive Satya Nadella said in an email to employees Wednesday morning.

Microsoft said it would take the $7.6 billion charge during its fourth fiscal quarter, which ended June 30, and that it would be a noncash charge reflecting the declining performance of the smartphone business, which continued to lose money and market share.

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

Last month we pointed out that Stephen Elop, the ex- top boss at Nokia was leaving Microsoft for a second time. A year ago, Microsoft said it was cutting 18,000 jobs in an enormous round of layoffs. The company has around 118,000 employees worldwide.

Microsoft has failed to get much traction for its Windows Phone platform even with the acquisition of Nokia. Microsoft bought aQuantive for $6.3 billion in a bid to increase its role in the online ad sector that was dominated by the likes of Google and Yahoo. The restructuring of the phone business is by far the biggest change Microsoft has announced. “The categories are business-focused devices, phones for customers looking for low-price smartphones, and high-end devices for Windows enthusiasts”.

Windows Phone will be absorbed by the mobile version of Windows 10 when the new operating system launches this year, and a new flagship Lumia smartphone has been tipped for release this September.