Update: Microsoft to shed 7,800 jobs as smartphone strategy falters
Company will also write off $7.6bn related to its Nokia acquisition
Microsoft will be cutting 7,800 jobs and writing off $7.6 billion as its ill-fated purchase of Nokia continues to weigh down on the tech giant’s bottom line.
Yesterday we reported on reports that Microsoft was planning to announce major job cuts as well as a major write-down in connection to its Nokia acquisition last year for $7.2 billion. The foray into the smartphone business dominated by Apple and Android’s OEM partners has been less than stellar for Microsoft as it has struggled to establish any significant presence in the cut-throat handset market.
Nobody expects Microsoft to exit the smartphone business though, and the company will continue to make handsets under the Lumia label. The company will also be launching Windows 10 Mobile OS later in the year.
Microsoft also announced 18,000 job cuts last year, again related to its Nokia acquisition. CEO Satya Nadella is quoted saying Microsoft would no longer focus on the growth of its mobile business, but would instead seek to build an ecosystem of products, including smartphones, that run its Windows software. In addition, Nadella has increased the development of apps and services for Android and iOS devices, in a clear departure from former head Steve Ballmer’s strategy.
Also in June, Microsoft announced it was selling its online display advertising business to AOL after it took a $6.2 billion accounting charge related to its acquisition of aQuantive, an online advertising company, in 2012.