Microsoft Writes Off Nokia Deal, Cuts 7,800 Jobs

By siliconindia | Thursday, 09 July 2015, 12:56 Hrs

BENGALURU: In the target of modifying the Windows Phone unit , Microsoft CEO Satya Nadella announced 7800 job cuts from the phone sect . For better focus and align resources of the company, Nadella initiates job cuts for the second time in a row. His initiative in March led to a cut off rate of 18000 jobs, the largest loss of employees in the 39-year old tech company.

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

“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,” he said.

This decision will lead to an impairment charge of approximately $7.6 billion associated with the Nokia Devices and Services (NDS) business. The company will reconstruct a charge of $750 million to $850 million.

At the same time, Microsoft confirmed writing off $7.6billion from its Nokia phone business acquisition, though it already paid $7.2 billion in 2014.

The email from Nadella that confirmed these plans of Microsoft also discussed about changes in its engineering teams and leadership, plans to transfer the company’s imagery acquisition operations to Uber, and modifications in Microsoft’s display advertising business to allow the telecom leader furtherand develop in technology and service. .

These plans and actions of Microsoft will initiate by the end of 2015, though execution may run up to the end of this fiscal year.

The CEO also told, "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."

Further detailed information about this will be released in the 2015 Annual Report on Form 10-K of Microsoft.

Critics say this creates a negative impact on the Phone Hardware segment of Microsoft and thus, the future of Windows Phone is now under uncertainty.

The pioneer in computer business, Miscrosoft is yet to make its way in the phone industry and is lagging far away from Android or iOS.