Microsoft to cut 7,800 jobs as it takes $7.6bn loss on mobile phone business
Microsoft has announced that it is cutting 7,800 jobs and taking a loss of $7.6bn on its money-losing mobile phone business.
Microsoft, chief executive Satya Nadella said this, adding that the company is reassessing its smartphone strategy.
According to him, the cuts add to the roughly 12,500 jobs eliminated in the past year from the Nokia phone business that Microsoft bought for $7.3bn in 2012. Some 2,300 of the jobs will be made in Finland, where Nokia is headquartered.
Nadella is writing off the company’s Nokia devices purchase and pulling back from being a smartphone manufacturer.
The Chief Executive said Microsoft was reassessing its smartphone strategy, though he gave no specific details. “We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family,” said Nadella. “In the near term, we’ll run a more effective and focused phone portfolio business while retaining capability for long-term reinvention in mobility.”
In another development, Microsoft’s former CEO Steve Ballmer bought Finland’s Nokia as its Windows Phone system has struggled to compete against Apple’s iPhone and Google’s Android system. But the purchase has failed to attract new users and Windows Phone still accounts for less than 5% of the market for mobile operating systems.
After taking into account restructuring charges the company has now written off more than the entire cost of buying Nokia.
The company is in the midst of a broader restructuring that includes cutting 18,000 jobs. Microsoft is expected to give more details when it reports earnings on 21 July.
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