Microsoft has again announced job cuts, which is their second major round of layoffs this year.
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“Over the past few weeks, I’ve shared with you our mission, strategy, structure and culture”.
“A monumental mistake. Microsoft had no business being in the cut-throat, low-margin phone business”.
Last year, Microsoft laid off 18,000 employees, many of whom also were working in the company’s newly acquired smartphone business.
Reports state that about a third of the layoffs will be in Finland, where Microsoft will shut down a product development unit, according to Finland’s national broadcaster YLE.
Microsoft didn’t offer much in the way of details on the job cuts, such as geographies and job functions affected, other than to identify Windows Phone hardware as the target for most of the position losses. It will also take on a restructuring charge totaling between $750 million and $850 million.
But Microsoft’s current chief executive, Satya Nadella, sought Wednesday to leave that deal in the past, The New York Times reported. The deal was signed by then-CEO Steve Balmer, who had wanted the Windows company to be in control of producing its own smartphones and tablets. 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 Android system or Apple’s iOS.
Microsoft Corporation (NASDAQ:MSFT) said that it plans to restructure its mobile device hardware business to place more focus on resource alignment. It bought the Finnish company’s devices and services businessonly last year for $7.2 billion. Nadella further added that rather than concentrating mainly on the growth of a standalone phone business, Microsoft would change its strategy “to grow and create a vibrant Windows ecosystem that includes our first-party device family”. Late last month, Microsoft sold Bing Maps imagery technology to Uber and transferred its display advertising business to AOL.
The cuts indicate that Microsoft will likely focus its mobile efforts on its high-stakes Windows 10 software release, due later this month, rather than on developing smartphones, analysts said.
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Shares rose 41 cents to $44.71 in early trading.
