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Microsoft 'Streamlines' Its Smartphone Business, Cutting 1850 Jobs, Recording $950 Million Loss

Microsoft 'Streamlines' Its Smartphone Business, Cutting 1850 Jobs, Recording $950 Million Loss

Posted May 25, 2016 at 1:57pm by iClarified · 8626 views
Microsoft has announced plans to 'streamline' its smartphone hardware business, a change that will impact up to 1850 jobs and see the company record an impairment and restructuring charge of approximately $950 million, of which approximately $200 million will relate to severance payments.

"We are focusing our phone efforts where we have differentiation — with enterprises that value security, manageability and our Continuum capability, and consumers who value the same," said Satya Nadella, chief executive officer of Microsoft. "We will continue to innovate across devices and on our cloud services across all mobile platforms."

Microsoft anticipates this will result in the reduction of up to 1,350 jobs at Microsoft Mobile Oy in Finland, as well as up to 500 additional jobs globally. Employees working for Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, are not in scope for the planned reductions.

As a result of the action, Microsoft will record a charge in the fourth quarter of fiscal 2016 for the impairment of assets in its More Personal Computing segment, related to these phone decisions.

The actions associated with today's announcement are expected to be substantially complete by the end of the calendar year and fully completed by July 2017, the end of the company's next fiscal year.

Just one week ago, the company announced that it was selling Nokia's feature phone business to Foxconn and HMD for $350 million. Following last year's write off of $7.6 billion and slashing of 7,800 jobs, today's announcement is basically the tragic end to Microsoft's acquisition of Nokia.

The only glimmer of hope for Microsoft in mobile hardware appears to be the long rumored Surface branded smartphone; however, given its track record thus far, the company will have a challenging road ahead.

Microsoft 'Streamlines' Its Smartphone Business, Cutting 1850 Jobs, Recording $950 Million Loss
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PNHUNTER - May 26, 2016 at 4:18pm
Now we know why the ride bikes in Finland...
yas9in - May 25, 2016 at 7:05pm
I can't but agree with you. Like look at the Xbox, so unnecessarily complicated and hard to work with, so many useless updates, and you need constant connection to play most of the games. Alas though, Windows will always be the number on PC OS.
gamerscul9870 - May 25, 2016 at 2:43pm
You know the term "those who don't learn from history are doomed to repeat it?" Remember back in the day ere used to be those sega Genesis vs. SNES. That's the CAE here where Microsoft failed just like sega consoles except Microsoft failed in the smartphone market except in term of what happened in the 90s with the consoles, sega wasn't doing it as revenge, but falls in the same case like this.
Mr Logical
Mr Logical - May 25, 2016 at 2:35pm
This almost made me feel sorry for those who lost their job by not buying Microsoft. Hope they find new employment soon.
yas9in - May 25, 2016 at 3:27pm
Probably shouldn't feel too sorry for them, seeing as they are getting an average $100k severance payment per employee.
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