Microsoft is cutting 7,800 jobs as it seeks to charge up its sluggish phone hardware business. It is also writing off $7.6bn relating to its purchase of Nokia’s phone business last year. The restructure is in addition to 18,000 job cuts the company announced last year. Microsoft currently has more than 118,000 employees. Chief executive Satya Nadella said a “fundamental restructuring” of its phone business lay ahead.
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.
Satya Nadella, Microsoft CEO
The company paid $7.3bn (£4.7bn) in April 2014 for Nokia’s handset unit, but the deal left it with just 3% of the smartphone market. Now Microsoft is writing off more than the entire cost of the Finnish acquisition in what is known as an “impairment charge”. In addition, it is absorbing a $750m to $850m restructuring charge. Microsoft’s Windows Phone system has struggled to take on Apple’s iOS and Google’s Android system.
There’s no chance that the iPhone is going to get any significant market share. No chance.
Steve Ballmer, former Microsoft CEO, in 2007