Microsoft announced that it will layoff 7,800 employees as it looks to expand the reach of the Bing search engine.
Advertisement
The job cuts announcement on Wednesday is the second round since CEO Satya Nadella took charge in February 2014.
“I am committed to our first party devices, including phones”, said Nadella in am email to Microsoft employees. “In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group”, the CEO said.
It has been one year since Microsoft announced it’s plans for having a layoff of around 18,000 people.
Nadella has played up Microsoft’s cloud and enterprise software capabilities, but reports mention that investors have been concerned that the transition to cloud was not offsetting weakening sales of Windows and Office and a bleeding phone business.
The news follows Microsoft culling other divisions; it sold some of Bing Maps’ assets to Uber and its display advertising business to AOL.
The cuts will also require Microsoft to take a restructuring charge of between $750 million and $850 million, the statement said. “It is, however, positive that Microsoft has promised to bear its corporate social responsibility beyond the level required by law”. Microsoft bought aQuantive for $6.3 billion in a bid to increase its role in the online ad sector that was dominated by the likes of Google and Yahoo.
The company counts 1.5 billion as Windows customers spanning 190 countries, but its devices business, particularly, smartphones, failed to gain market share both in India and globally. However, they are required to focus their phone efforts in the near future while stimulating reinvention.
Microsoft CEO Satya Nadella stated that the company is revaluing its smartphone business, but he didn’t reveal any details regarding that. “We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software”, Nadella said in his email.
Advertisement
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. Nearly 25,000 employees have joined the company as a result of the deal.
