Microsoft’s $9.5 billion acquisition of the Nokia phone handset business in 2014 is even more of a bust than the company recognized a year ago when it cut 7,800 jobs – about 7% of its workforce- and took a $7.6 billion impairment charge related to the purchase.
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Nadella also promised innovation in “cloud services across all mobile platforms”.
Microsoft said it expects the latest layoffs in the smartphone division to be substantially complete by the end of 2016 and fully completed by July 2017, the end of its next fiscal year. Earlier this month, Microsoft sold the Nokia feature phone business to Foxconn, further distancing itself from the hardware side of the mobile phone market. Despite the layoffs and the effort to scale back, Myerson said Microsoft will continue to update and support its current Lumia and OEM partner phones, as well as “develop great new devices”.
Microsoft acquired Nokia for $7.2 billion in 2014.
Just a day after the anticipation of a massive job cut by Finnish giant Nokia, Microsoft has announced that it will cut about 1850 jobs in its smartphone division, owing to shrinking sales.
These layoffs and charges are in addition to the 7,800 job layoffs and $7.6 billion write-off at the unit announced a year ago. The company’s previous chief executive, Steven A. Ballmer, made the deal with the goal of transforming Microsoft, which was then struggling to keep pace with the likes of Apple and Google in the mobile business. Around $200 million of the $950 million impairment charge is being used for severance payments.
If today’s announcement is any indication, Microsoft is on the way to throwing in the towel on its mobile phone business. And this morning, it’s been revealed that more employees are to lose their jobs, most of which will go in Finland as Microsoft ends local phone design and manufacturing. “We had rumors that something would happen, but not that everything would go”, he said, adding that Microsoft had called up all its Finish employees and that the crowd fell “silent” when they heard the news.
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The decision means that Microsoft is scrapping what was left in Finland of Nokia’s former glory as the world’s former top mobile phone maker.
