Microsoft readying to lay off 7,800 workers from mobile phone unit

The reign of Microsoft CEO Satya Nadella has been punctuated by massive change in management and massive layoffs - Photo from Microsoft

By Gadjo Cardenas Sevilla

More change is afoot at Microsoft which has seen various departures in management due to recent restructuring, the ripple effect of these changes and compressions is the loss of jobs. Microsoft announced today that it will lay off 7,800 workers, majority of these coming from the declining smartphone unit, which it acquired from an already weakend Nokia just last year for US $7.2 billion. Microsoft is the third largest player in mobile behind Apple and Google, but it holds a tiny 2.5 per cent market share, with no indication of moving up.

These layoffs are separate and in addition to the expected 18,000 employees that Microsoft announced would be laid off a year ago as part of the larger restructuring plan. It must be remembered that Microsoft inherited 25,000 employees as a result of the Nokia acquistion last year. This latest development questions what the future of Windows on Mobile Phone will be. Microsoft also relayed it is writing off $7.6 billion related to its acquisition of Nokia and resulting restructuring costs which comes off as a loss for the company.

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

Microsoft is also divesting itself from mapping and image acquisition which it looks to sell to Uber as well as its display advertising business, the Redmond Giant seems to want to focus on its core software and services products.

“I am committed to our first-party devices including phones,” Nadella said. “However, we need to focus our phone efforts in the near term while driving reinvention.”

Windows 10, which ships on July 29, will be the sole operating system for PCs, tablets as well as mobile devices, including smartphones.

Windows 10 has the unenviable task of winning over many legacy users who have been satisfied with older versions of Windows including Windows XP and Windows 7. Microsoft is aiming for 1 billion Windows 10 users in 2 to 3 years.

Source: Microsoft