Microsoft to Lay Off 7,800 Employees 'Primarily' in its Phone Business

[MacRumors]

In a letter to Microsoft employees sent out this morning, company CEO Satya Nadella confirmed that over the next few months Microsoft will undergo a massive restructuring mainly focused on its phone business and which will see the loss of "up to 7,800 positions globally."

In addition, the company will take a $7.6 billion impairment charge and an estimated restructuring cost of $750 million to $850 million as Microsoft attempts to rebuild its phone hardware division after its 2013 acquisition of Nokia's hardware units that has failed to generate momentum.

In his letter to Microsoft employees, Nadella reaffirmed that he doesn't take such changes lightly, and that the company has plans for its future, with Microsoft moving from a hardware-focused phone strategy and pivoting to the building of a "vibrant Windows ecosystem."

I don't take changes in plans like these lightly, given that they affect the lives of people who have made an impact at Microsoft. We are deeply committed to helping our team members through these transitions.

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.

As the iPhone and Android devices have taken increasingly large shares of the smartphone market, Microsoft's Windows Phone division and BlackBerry have struggled to compete, seeing their market shares fall to the low single digits in many countries. Nadella's suggestion of Microsoft's phone business shifting to a more software-focused angle could point towards services like Cortana -- already announced to be coming to iOS later this year -- seeing an increase in attention and focus from Microsoft in the coming months.

Article Link: Microsoft to Lay Off 7,800 Employees 'Primarily' in its Phone Business

 

[diddl14]

Wow. That's a sad ending of the Nokia legacy. These guys made great phones..

 

[JoJack82]

That's 7500 more people than the number of people who own a Windows phone.

 

[joesegh]

This should come as a surprise to absolutely no one. Buying a hardware business when your long-term future is clearly in multi-platform software was always a dumb move.

Thanks, Steve Ballmer!

 

[bpeeps]

Wow. That's a sad ending of the Nokia legacy. These guys made great phones..

The Nokia ringtone will live on in our hearts.

Rest in peace.

 

[BigMcGuire]

"We are deeply committed to helping our team members through these transitions." You're fired. Kthxbai.

 

[Thunderhawks]

Give it up.

iPone and Android phones will be it (As in market domination).
Yes, Nokia may have a foothold internationally, but people do not want umpteen operating systems.
Look at Zune and write things off asap.
Check with Blackberry what they accomplished with their latest products.

 

[sziehr]

So they finally get that having an install base of like 10% will never get them any where. They are just not made to have first party hardware like apple and it hurts them. They tried to buy the talent and that seemly failed. The idea of selling license it out like android will get them no where when google gives the whole apple cart away. So they need to go back to the drawing board and just stay out of the mobile OS and focus on there core which is office and exchange the things that makes them money

 

[Exponent]

I wonder how this will affect the downtown Sunnyvale office, or the Mountain View office where (by my understanding) a lot of hardware is developed....

 

[Yixian]

What's the news on Xbox?

 

[joneill55]

That's 7500 more people than the number of people who own a Windows phone.

Haha...... True Dat. Strike 2 for Satya "Mobile and the cloud" stradergy
#
TheirShipHasSailed

 

[firedept]

The writing was on the wall. With a smaller piece of the smartphone market, it had to happen. Better they not ignore it and stop the bleeding now, than do as Blackberry did.

 

[Benjamin Frost]

Microsoft.

On their way to becoming a micro-company.

 

[FSMBP]

I wish Microsoft's Windows Phones were successful. They came out in 2010 with a modern UI before iOS or Android. They integrate with PCs very nicely & they are responsive devices.

I feel like if it was Microsoft vs. Apple on the phone business, Apple would be further pushed to dominate/innovate in software (just like Apple did with Mac OS X in the early/mid 2000s).

 

[JeffyTheQuik]

Mrs. thequick had a Windows phone, and she loved it. It's a shame that the marketing for those was done so poorly.

Competition is the lifeblood of innovation.

 

[Boosf]

Microsoft had a phone business?....

 

[The Economist]

Out of the 4 people that I know and owns/owned a Nokia/Windows Phone, just 1 bought one because he genuinely liked the phone. The rest had lost their iPhone and a Windows Phone was the cheapest phone they could find. They all hated their Nokia/Windows Phone.

So many layoffs...

 

[cmChimera]

Hope some of these guys get picked up by Apple.

 

[Kaibelf]

It's a shame it came to this, but MS has never really been a hardware company and their efforts to truly make a phone platform were lukewarm when it mattered. This is all just one big missed opportunity.

 

[Binarymix]

So when will they exit the tablet market, since the market is shrinking as it is?

 

[Rogifan]

So basically Elop and Microsoft destroyed an independent Nokia which strengthened Samsung and was basically neutral for Apple. And I'm sure Elop left both Nokia and Microsoft a very rich man while tens of thousands were laid off. Nice job Ballmer.

 

[AppleInLVX]

"We are deeply committed to helping our team members through these transitions." You're fired. Kthxbai.

No kidding. Those poor people. It's the thing I hate most about working for "The Man". You're not even human anymore. You're a 'resource' and if the money isn't there, you can go starve in a ditch for all anyone at your company gives a rat's ass.

 

[Codestud]

Give it up.

iPone and Android phones will be it (As in market domination).

Competition is a good thing for consumers, and I don't think that an iOS + Android monopoly is a good thing.

Microsoft are not giving up on the Windows Phone software. However, the upcoming introduction of Universal Apps with Windows 10 is probably the last throw of the dice, to see whether this will drive more adoption of Windows tablets and phones.

If this strategy doesn't work, then I guess Windows will then only ever be seen as a desktop and server OS.

 

[Zarniwoop]

Hope some of these guys get picked up by Apple.

2300 of them laid off in Finland.. last year thousands had to leave. So Apple, welcome. There are thousands of well educated english speaking software engineers in Finland ready for challenges.

 

[Rogifan]

This should come as a surprise to absolutely no one. Buying a hardware business when your long-term future is clearly in multi-platform software was always a dumb move.

Thanks, Steve Ballmer!

He did it so they wouldn't go Android. But it was still a dumb idea as Microsoft's strength is cloud and Office on multiple platforms. Windows 10 is basically Microsoft try to make Windows 8 palatable in the enterprise.