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Microsoft slashes 7,800 jobs in phone business, writes off $7.6B Nokia acquisition

By Michael Fisher |
July 8, 2015 9:50 AM

In an email to employees Wednesday morning, Microsoft CEO Satya Nadella dropped the sobering news hinted at by his “tough choices” memo of several weeks ago: the company is “fundamentally restructuring” its phone business.

Phrasing the changes as part of Microsoft’s ongoing “reinvention,” Nadella said Microsoft would cut up to 7,800 jobs globally over the next several months. The cuts will take place primarily in the company’s mobile-phone business, which grew from the acquisition of Nokia’s Devices and Services business in April of last year. Nadella also announced that Microsoft would be taking an impairment charge of $7.6 billion related to that acquisition –more than the $7.2 billion Microsoft paid for Nokia in the first place– as well as a restructuring charge of $750 million to $850 million. This follows recent sell-offs by Microsoft in its mapping and advertising business.

Nadella’s email seeks to paint these developments in a positive light, but it’s vague on specifics when it comes to the company’s handset efforts going forward. The CEO says he is “committed to our first-party devices including phones,” promising “Windows fans the flagship devices they’ll love” – but also says that “in the longer term, Microsoft devices will spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly. Our reinvention will be centered on creating mobility of experiences across the entire device family including phones.”

What that means for the future of Windows 10 as a smartphone platform is anybody’s guess at this point, but it hardly needs to be said that impairment charges and layoffs aren’t the most promising signs for the world’s third-place smartphone platform.

http://pocketnow.com/2015/07/08/microsoft-slashes-7800-jobs

more:
http://money.cnn.com/2015/07/[....]rosoft-layoffs-7800/index.html
http://liliputing.com/2015/07[....]3A+Liliputing+%28Liliputing%29
http://www.mcvuk.com/news/rea[....]-7-6bn-from-nokia-deal/0152353
http://www.networkworld.com/a[....]0-layoffs.html#tk.rss_wireless
http://www.eurogamer.net/arti[....]it-restructures-phone-business
http://www.bloomberg.com/news[....]rosoft-to-eliminate-7-800-jobs
http://www.trustedreviews.com[....]estructure-smartphone-business

Microsoft cuts 7,800 jobs, writes off billions related to Nokia deal
http://www.techradar.com/news[....]-related-to-nokia-deal-1298659

Microsoft subtly admits the Nokia deal was a failure and 7,800 employees will lose their jobs
http://mashable.com/2015/07/08/microsoft-layoffs-nokia/

Microsoft Waves the White Flag in Battle with iPhone and Android
http://bgr.com/2015/07/08/mic[....]+%28BGR+|+Boy+Genius+Report%29






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Posted: 2015-07-08 16:31:51
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Makes me sick to my stomach what they did with Nokia, what a shame for all those employees, hopefully they all manage to get into other jobs.

MS did a very poor job with Nokia, it far too much for them to take on.
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Posted: 2015-07-08 22:19:24
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No ... what SHOULD make you sick to your stomach is NOKIA brass themselves, before Elop (both the last two CEO's especially that old guy for 11yrs) ... let me recap:

6yrs waiting for S60 to take on what S70 proposed with 7700/7710 tablets/phablets!
S60 between 2nd and 3rd Edition became VERY stagnant ... adding Ruby/Python was a JOKE to brag about. useful but a joke.
STILL making phone keyboards (in the 1-9+0+*+# arrangement) - basically holding the world back!!
highering only from within having USELESS executives drive initiatives like Nokia Music who had NO education nor experience in their fields moved into nor hired for!

THAT is what makes me sick.

I do feel all those employees did NOT speak up enough during Nokia's heyday to CHANGE Nokia and drive innovation like they once where - N92 was the very LAST innovative product (TV streaming/broadcast natively). But I do feel their not displaced after the promise of keeping their jobs - for at least 12mths after the MS purchase of Nokia ... at least they got that ... 12mths to plan.
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Posted: 2015-07-09 01:50:33
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Is this the beginning of the end for Windows Phone?

By Manish Singh
Published 1 hour ago

End of the road

Microsoft announced yesterday that it is slashing 7,800 jobs, mostly from the phone-hardware business it picked up from Nokia. As a result, the software giant is writing off $7.6 billion, which is actually more than the $7.2 billion it paid Nokia in the first place. But, more importantly, the move signifies that Windows Phone, its smartphone operating system, is now being put on the slower release cycle.

Microsoft is scaling back. The software giant is losing money instead of making anything big off its phone division. In the five years of its existence, Windows Phone is yet to get past three percent market share. And that’s finally a reality check to its ambitions.

Too Little, Too Late

Microsoft was late to join the modern mobile party. Apple unveiled the original iPhone in early 2007, and Google started to develop Android in 2008. But it was not before February 2010 that Microsoft announced Windows Phone. Ever since, the company has tried to play catch up with other companies, but despite its efforts, things never seemed to be working out.

What Happens Now?

It’s evident that the Nokia gamble hasn’t worked out for Microsoft. But does it mean there won’t be any new Windows Phones? Not really. In an email to employees, Satya Nadella writes, "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".

"In the near-term, we'll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility", adds Nadella. This suggests that the company wants to reduce the number of phones it launches every year, not close down shop for good.

In the email, Nadella goes on to promise that the company will be releasing "better products". "We'll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they'll love", Nadella wrote.

The Problem

But it might not work, and make things worse for Windows Phone. The problem is that Windows Phone -- unlike Android or iOS -- isn’t anywhere popular enough to attract users and make them purchase the devices. Microsoft is betting on reducing the number of devices, hence the operating cost, investment, and, eventually, loss. What it doesn’t realize is that this move could even further reduce its relevance in the mobile market.

But perhaps that’s not the aspect Microsoft is aiming at anymore. We have seen Chinese companies like OnePlus manage to generate major revenue despite not releasing many phones. The company has only made one phone so far, and it has been a huge success. With Windows 10 on the horizon, Microsoft is perhaps hoping to turn the tables with a flagship smartphone. But will it be able to pull that off? Only time will tell.

http://betanews.com/2015/07/0[....]etanews+Full+Content+Feed+-+BN

Microsoft 'will continue to make phones for at least two more years'
http://www.digitalspy.co.uk/t[....]ore-years.html#~phW1zfEEftVDnG


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Posted: 2015-07-09 11:25:01
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Told you so: Microsoft Lumia and Windows Phone are dead
http://www.computerworld.com/[....]windows-phone-dead-itbwcw.html

Microsoft aborts Nokia phone business with 7,800 job losses
http://www.thedrum.com/news/2[....]phone-business-7800-job-losses

Windows Phone was great, but here's why it deserved to die
http://uk.businessinsider.com/what-windows-phone-got-right-2015-7



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Posted: 2015-07-09 13:40:43
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@Supa_Fly

There is no denying that Nokia in itself made a ton of mistakes long before MS came and bought them, I remember being forced to leave the comfort of Symbian S60 after owning a S60v5 phone that was a joke of a iPhone competitor.

My problem with MS is that they didn't help the situation, they sent Elop in who then completely brought Nokia to its knees, then bought it before realising how big of a thing they got themselves into. Nokia should have been bought by a Chinese OEM like Motorola was by Lenovo, who are prepared to invest a lot in it.

@Diffy

Wow, the media are not holding back at all, some sharp and painful headlines there.

I feel like of all that Microsoft has done with Nokia, the 3 very best products were the Lumia520, Lumia1020 and Lumia1520, everything else was just 'meh...'.
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Posted: 2015-07-09 18:32:08
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Nokia's greatest asset is their camera expertise but even then, it wasn't enough to save their incompetent os (i.e. Pureview on 808). Microsoft themselves should have realized this that their major problem is within themselves not on nokia's capabilities.

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Posted: 2015-07-10 01:38:17
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@tsepz..

Yup, I agree... from how it looks, if the media was a person, it seems that its "feelings was hurt" by the news of Microsoft abandoning Nokia. Probably why there's no holding back on those headlines.

Im also thinking that the comments from fans will not be any kinder... since they're given only 2 years before their phones are stopped being produced.

Still, I was a little surprised at just how rich Microsoft is, its not a typical tech company that can write off BILLIONS and still keep on going.


cheers!

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Posted: 2015-07-10 06:12:42
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I guess this news will stop me promoting Windows phone. It's a shame. Such an easy os to operate.
How about the rumours of supporting android apps in Windows 10? I was looking forward to that.

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Posted: 2015-07-10 13:11:20
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Well said tsepz I also wish Microsoft did more. At least they promised flagships but now I have my doubts about the whole wp ecosystem,
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Posted: 2015-07-10 22:59:48
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