Microsoft to axe 7,800 jobs in smartphone business restructure

0
575


US-firm announces $7.6 billion write-off from Nokia deal amidst restructure of manufacturing business

Microsoft has announced plans to cut up to 7,800 jobs as part of a restructure of its phone and hardware business.

The job losses come a year after Microsoft bought Nokia’s handset division in a $7.2 billion deal, and are in addition to last July’s announcement of 18,000 layoffs. These cuts were mainly completed in April.

In an email to staff, Microsoft CEO Satya Nadella said the US software giant was looking to “better focus and align resources.”

It also follows a management restructure last month that saw former Nokia head Stephen Elop leave the firm along with three other executives.

In the email, Nadella said: “We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family.”

“In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”

$7.6 billion “impairment” charge

The company also said that as a result of the layoffs and restructuring, it will record an impairment charge of around $7.6 billion, plus a restructuring charge valued at between $750 million to $850 million.

Most he layoffs are expected to be come by the end of 2015, with Microsoft predicting the full restructure will be completed by the end of the fiscal year (March 30 2016).

Satya1-webWindows is the third biggest smartphone OS in the UK with around 10 per cent of the market, significantly less than market leader Android (52.5 per cent) and iOS (36.8 per cent), according to recent figures from Kantar Worldpanel ComTech.

According to figures from IDC, the share is even smaller globally – just 2.7 per cent – compared with Android (78 per cent) and iOS (18.3 per cent).

Nadella (pictured) added: “I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.

“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.”

NO COMMENTS

LEAVE A REPLY