Satya Nadella, who became Microsoft’s chief executive early previous year, said it would also take a restructuring charge of $750 million to $850 million associated with the Nokia acquisition.
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Microsoft Corporation (NASDAQ:MSFT) said that it plans to restructure its mobile device hardware business to place more focus on resource alignment. “In the near term, we’ll run a more effective and focused phone portfolio business while retaining capability for long-term reinvention in mobility”. While it still dominates the market for personal computers, Microsoft has struggled in the market for mobile devices, the majority of which are powered by the Google Android system or Apple’s iOS.
For Microsoft, the last month or so has been monumental in affixing the cloud-first, mobile-first mantle to every aspect of its business and for shedding operations that didn’t fit with its new knitting. Microsoft will also reduce the number of phones it releases and refocus its efforts into entry-level handsets, corporate devices given to employees and niche “Windows fans”, according to sources in the company. Last July, the Nokia acquisition led to 18,000 job cuts.
The computing giant recently confirmed plans to lay off 7,800 employees and write down $7.8 billion from its acquisition of Nokia.
“We believe these cuts are positive for Microsoft as they help streamline the business by getting rid of non-core components”, said Mark Moerdler, an investment analyst with Bernstein Research, in a note to investors.
Microsoft had 118,600 employees as of March 30, with about 60,000 of those workers in the United States. Last month, he announced a deal to hand over most of Microsoft’s remaining display advertising business to AOL Inc. Microsoft Corporation (NASDAQ:MSFT) would not have been able to make a significant stand in the mobile device arena were it not for this deal.
Pekka Pekkala, the communications head for the country’s prime minister, said on Twitter that 66% of Microsoft’s Finland staff will be dismissed.
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They had been interested in that for quite some time as the company had been entering into intellectual and financial tie-ups with the mobile phone manufacturer for quite a long time with their windows based phones, however, the fall of Nokia was imminent.
