Microsoft Takes $7.6 Billion Hit On Nokia Deal, Cuts 7,800 Jobs

Things are shaking up at Microsoft. Recently former Nokia CEO Stephen Elop who returned to Microsoft after the company’s acquired Nokia’s hardware business left Microsoft again alongside head of phones Jo Harlow. Microsoft CEO Satya Nadella has already said that he will make “tough choices” in areas where things are not working and the biggest indication of that is coming today.

Microsoft is writing off a cool $7.6 billion related to its acquisition of Nokia’s device business and it has also announced a new round of job cuts that’s going to effect some 7,800 employees.

“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 an email to employees today.

In the near-term Microsoft is going to run a “more effective and focused” phone portfolio while retaining the capability for long-term reinvention in this arena.

This means that the flurry of Lumia devices might be meeting their end, with Microsoft simplifying the Lumia product line to only a couple of handsets, later this year Microsoft is expected to launch two new Lumia handsets powered by Windows 10 Mobile. There may not be as many low-end and mid-range Lumia devices as there used to be previously.

The new round of job cuts at Microsoft follow the over 18,000 job cuts over the past year and Microsoft was able to complete a significant part of that move back in April this year.

Nadella has iterated the company’s commitment to devices like smartphones but this move shows that it may start focusing more on quality as opposed to quantity.

Adnan Farooqui
Categories: Cellphones
Tags: lumia, Microsoft, Satya Nadella