Microsoft attempted to remedy that by buying Finnish handset maker Nokia’s smartphone business for $9 billion in 2013.
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This decision is based on a restructuring plan by Microsoft CEO Satya Nadella.
Nadella in his email also added that the company has written down the value of the phone business acquired from Nokia, “We announced a fundamental restructuring of our phone business”. Such ambitions haven’t worked so far, with Windows Phone unable to gain meaningful traction against iOS and Android. The layoffs are likely to take place over the next several months as the Tech Giant attempts to cut costs in an overly competitive market. It had 118,600 employees at the end of March, with about 60,000 of them in the US. Microsoft has confirmed that it won’t release its next flagship Windows Phone until Windows 10 Mobile is available. The deal was touted as an effort to jumpstart Microsoft’s weak position in a global market dominated by smartphones using rival Google and Apple platforms. It’s hard to say that Microsoft’s vision and has been this clearly delineated since its early days under founder Bill Gates. About a year ago he announced axing up to 18,000 jobs, biggest cuts in its 39-year history.
The company said in a statement that it will “restructure the company’s phone hardware business to better focus and align resources”.
“Overall, we believe Nadella’s proactive approach at cleaning up the Nokia acquisition is a positive “tipping of the hand” around Microsoft’s future focus on software”, FBR Capital Markets analyst Daniel Ives wrote in a note.
However, Bloomberg’s sources claim that Microsoft expects to manufacture its own smartphones for at least another two years.
Microsoft announced that it will layoff 7,800 employees as it looks to expand the reach of the Bing search engine. In a memo given to Microsoft employees, the CEO remarks that he is “committed to our first-party devices including phones”, but considers the wider implications of the announcement.
Despite its appearance, Microsoft’s move to cut 7,800 jobs isn’t bad news for the company.
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Making apps like business software Office and personal digital assistant Cortana for a range of devices is clearly where Microsoft wants to go, Jack Narcotta, an analyst with Technology Business Research, told IBD.
