Microsoft to axe 7800 jobs at phone division

WASHINGTON – Microsoft will cut 7,800 jobs and reorganise its Windows Phone unit, which has struggled in the mobile market.

“Over the past few weeks, I’ve shared with you our mission, strategy, structure and culture”. “We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love”. Microsoft had about 120 000 employees at the end of March. With regard to the job cuts, the company will also accrue a restructuring charge that can be anywhere between $750 million to $850 million.

Cross Research analyst Shannon Cross said she expects more cost cutting in the next couple of years as Microsoft needs to become more competitive in the smartphone market. According to Nadella, search is a core feature of everything Microsoft is doing, and a technology that impacts Cortana, Office 365, Windows 10, and Azure, Microsoft’s cloud platform. In a memo given to Microsoft employees, the CEO remarks that he is “committed to our first-party devices including phones“, but considers the wider implications of the announcement.

While Microsoft will not stop making smartphones, Nadella on Monday said Microsoft would no longer focus on the growth of its own smartphone business.

The latest cuts may be especially detrimental to Finland, where many of Nokia’s employees work.

Microsoft will record a charge in the fourth quarter of fiscal 2015 for the impairment of assets and goodwill in its Phone Hardware segment, related to the NDS business.

“Microsoft Corp. today announced plans to restructure the company’s phone hardware business to better focus and align resources, ” the Washington-based company said in a statement. Despite the promising features of Nokia’s Lumia product line and the Windows Phone operating system, Microsoft’s market share remained in low single digits – just over 3 percent this year – as consumers flocked to phones running Apple’s iOS and Google’s Android instead.

SAN FRANCISCO (Reuters) – Microsoft Inc’s future in mobile devices likely hinges on the software maker’s ability to convince developers to create apps for the phone version of Windows 10 after its ill-fated Nokia acquisition helped trigger 7,800 layoffs.

This could be a further sign of the end times for Windows Phone, which has already been declared dead many times over.