The company has been planning the job cuts since past year, when Satya Nadella became its chief executive officer.
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“Over the past few weeks, I’ve shared with you our mission, strategy, structure and culture”. It announced yesterday that it will lay off 7,800 employees, a lot of them in its smartphone unit. Combined with 18,000 job cuts previous year, most of them also related to the Nokia acquisition, Microsoft will end up letting go a majority of workers who joined the company as a result of the deal.
The cuts will also require Microsoft to take a restructuring charge of between $750 million and $850 million, the statement said. “Adding on a mobile phone business that Microsoft probably should abandon is like attaching an anchor to said straitjacket and tossing the patient into the ocean”. 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.
The company’s employees were told by Mr. Nadella that he was committed to their first-party devices, together with phones.
While it still dominates the market for personal computers, Microsoft has struggled in the market for mobile devices, most of which are powered by the Google Android system or Apple’s iOS.
What Nadella appears to be saying is this: We are going to continue making devices, including phones; our mobile effort will include proprietary software and hardware (defocusing hardware partners); our devices will all run Windows; our phones will be tailored for the specific markets we are targeting.
As per the new strategy, Microsoft plans to narrow focus to three customer segments where it can make unique contributions and differentiate.
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Microsoft Corp (MSFT.O) said on Wednesday it is cut top 7,800 jobs, or almost 7 (seven) percentage of their personnel, and take about seven dollars.six bill associated to its Nokia smartphone business venture. Nadella explained in an email to employees that Microsoft is planning to move phones into the devices business, and by doing that, would create a more effective phone portfolio. But he also warned in the message that Microsoft would need to “make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value”.
