Microsoft Job News: Company Cutting 7,800 Jobs, Mostly in Struggling Smartphone Department
Microsoft will lay off 7,800 workers as it restructures its struggling smartphone business, according to CNet.
Most of the workers being cut are from the company's smartphone department.
Microsoft purchased Nokia for over $7.2 billion last year. Microsoft wanted to create smartphones that were an alternative to Apple's iPhone and phones that run on the Android operating system.
Analysts heavily criticized Former Microsoft CEO Steve Ballmer for acquiring Nokia, according to CNN Money.
The 7,800 laid off workers represent about 6.5 percent of Microsoft's 118,584 employees as of March 31.
Microsoft said because of these layoffs and restructuring, the company will also take a charge of around $7.6 billion related to the assets it took when it acquired the Nokia Devices and Services business. This means that Microsoft paid too much for Nokia and the company wants to write off the assets it considers now "worthless."
Microsoft is not completely giving up on making mobile phones though.
"I am committed to our first-party devices, including phones," Microsoft CEO Satya Nadella said in a statement Wednesday. "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."
Last month, Microsoft announced that Nokia's former CEO Stephen Elop was leaving the company. Elop headed Microsoft's devices group. After Elop's departure, former Nokia executive Jo Harlow, who reported to Elop, would join him.
Microsoft has not been able to gain popularity in the smartphone market, owning just a 2.5 percent market share.
Microsoft is focusing on its big project, Windows 10, which is expected to arrive to the public at the end of this month. Even with the popularity of Windows products on most computers worldwide, smartphone users are still showing a preference towards Apple and Android smartphones.
The layoffs announced Wednesday were proceeded by an e-mail sent by Nadella to employees last month. In the e-mail he said that there was a need to make "some tough choices."
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