SEATTLE – Microsoft said Wednesday it would eliminate up to 7,800 jobs, more than 6 percent of its workforce, in a major overhaul of its struggling smartphone business.
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“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.
“We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem”, wrote Satya Nadella, who was named Microsoft’s CEO in February 2014, in an email to employees.
About 2,300 of the fresh cuts will hit Microsoft’s workers in Finland, according to a tweet from the country’s finance minister, Alexander Stubb.
According to some analysts, job cuts may mark the beginning of Microsoft smartphones exit from mobile business.
“I want to discuss our plans to focus our talent and investments in areas where we have differentiation and potential for growth”, wrote CEO Satya Nadella in a company note.
After Nadella took over Microsoft, he made it clear that he would have to make aggressive changes to revitalize the company. Its Nokia acquisition was an attempt to control both phone software and hardware, as Apple does.
The company’s employees were told by Mr. Nadella that he was committed to their first-party devices, together with phones.
At the end of March, Microsoft had more than 118,000 employees globally.
The company is in the midst of a broader restructuring announced previous year that includes cutting 18,000 jobs.
Windows Phone will be absorbed by the mobile version of Windows 10 when the new operating system launches this year, and a new flagship Lumia smartphone has been tipped for release this September. It completed its acquisition of Nokia past year for $9.5 billion, though Nokia came with about $1.5 billion of cash as part of the deal.
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Microsoft bought the Finnish phone manufacturer Nokia’s devices and services business barely 14 months ago, in a bid to strengthen and expand its presence in the ever-so-competitive smartphone market. “Our reinvention will be centred on creating mobility of experiences across the entire device family including phones”.
