Microsoft’s purchase of Nokia for US$7.2bn last year hasn’t exactly gone according to plan as the company has confirmed that it is to let go 7,800 staff in its smartphone division on top of the 18,000 it had previously confirmed would be leaving the company.
News had emerged this morning of the inevitable announcement by the company and its plans for its smartphone division, but the severity of the cuts has now been confirmed in a statement by Microsoft.
As well as the major job cuts, the company says it will record an impairment charge of approximately US$7.6bn related to assets associated with its acquisition of Nokia in addition to a restructuring charge of approximately US$750m to US$850m.
The company has managed to sell most of its mobile business software including elements of Nokia’s HERE maps to ride-sharing company Uber and much of its Bing digital advertising, including mobile, to AOL.
“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 to staff in an email. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”
The company will continue its efforts to break the duopoly of operating systems of iOS and Android, but based off the most recent statistics, Windows Phone only comprises 1.11pc of the entire market share of operating systems
Nadella had previously spoken of the need to make “tough choices” for the company and where its future lies, but streamlining appears to be the solution, with jobs cuts now totalling more than 25,000 during the past two years.
Satya Nadella image via Johannes Marliem/Flickr