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Microsoft to Lay Off 7,800 Employees 'Primarily' in its Phone Business

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micro-soft-storyIn a letter to Microsoft employees sent out this morning, company CEO Satya Nadella confirmed that over the next few months Microsoft will undergo a massive restructuring mainly focused on its phone business and which will see the loss of "up to 7,800 positions globally."

In addition, the company will take a $7.6 billion impairment charge and an estimated restructuring cost of $750 million to $850 million as Microsoft attempts to rebuild its phone hardware division after its 2013 acquisition of Nokia's hardware units that has failed to generate momentum.

In his letter to Microsoft employees, Nadella reaffirmed that he doesn't take such changes lightly, and that the company has plans for its future, with Microsoft moving from a hardware-focused phone strategy and pivoting to the building of a "vibrant Windows ecosystem."

I don’t take changes in plans like these lightly, given that they affect the lives of people who have made an impact at Microsoft. We are deeply committed to helping our team members through these transitions.

I am committed to our first-party devices including phones. 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.

As the iPhone and Android devices have taken increasingly large shares of the smartphone market, Microsoft's Windows Phone division and BlackBerry have struggled to compete, seeing their market shares fall to the low single digits in many countries. Nadella's suggestion of Microsoft's phone business shifting to a more software-focused angle could point towards services like Cortana -- already announced to be coming to iOS later this year -- seeing an increase in attention and focus from Microsoft in the coming months.

Tag: Microsoft

Top Rated Comments

J
JoJack82
140 months ago
That's 7500 more people than the number of people who own a Windows phone.
Score: 36 Votes (Like | Disagree)
diddl14 Avatar
diddl14
140 months ago
Wow. That's a sad ending of the Nokia legacy. These guys made great phones..
Score: 18 Votes (Like | Disagree)
BigMcGuire Avatar
BigMcGuire
140 months ago
"We are deeply committed to helping our team members through these transitions." You're fired. Kthxbai.
Score: 15 Votes (Like | Disagree)
bpeeps Avatar
bpeeps
140 months ago
Wow. That's a sad ending of the Nokia legacy. These guys made great phones..
The Nokia ringtone will live on in our hearts.



Rest in peace.
Score: 14 Votes (Like | Disagree)
AppleInLVX Avatar
AppleInLVX
140 months ago
"We are deeply committed to helping our team members through these transitions." You're fired. Kthxbai.
No kidding. Those poor people. It's the thing I hate most about working for "The Man". You're not even human anymore. You're a 'resource' and if the money isn't there, you can go starve in a ditch for all anyone at your company gives a rat's ass.
Score: 13 Votes (Like | Disagree)
AppleInLVX Avatar
AppleInLVX
140 months ago
Not to get into a political argument, but what would you do if you ran the company? Would you seriously keep paying these people after you shut down this area of the business and had nothing for them to do just to be nice?
Well, I'm a minion, not the ruler, and always have been, so I'm possibly the wrong one to ask seeing as how I lack the knowledge. Truthfully, I get that you can't keep paying people if the cash isn't there. I get that circumstances sometimes result in crappy outcomes. That's just life.

However, I think that, in a broad-reaching way, companies have become far more skewed and heartless in recent decades. I think that in a company the size of Microsoft, there's probably a little leeway when it comes to reassignment of talented people. I don't think that laying of 7K+ people is necessary. I've seen it time and again where a company has layoffs one month, and hires the next. They don't hire as many as were laid off, but they do find roles for people. Why not invest some energy into minimizing that turnaround? Further to that, why not give the employees some say? Maybe some would leave willingly to pursue other things leaving roles open for those who want to stay or would be hurt by leaving.

My dad once told me that back in the 50s when the factory he worked at had to let people go, they would often let go the youngest and most talented, the reason being that those people could far more easily bounce back from a setback and handle it than an older guy with a family to feed. Companies do not consider that at all anymore. People stopped being people and became numbers on a spreadsheet.

I don't believe that layoffs or job losses are avoidable and we can somehow all live in utopia, but I do think there's a space between that and showing up for work and being told you can just leave and we don't care where you go. And at the same time the bigwigs are writing politically correct canned statements about "our former colleagues" going through "transitions" about people whose names they never bothered to learn.

Honestly, I think they can do better.
Score: 7 Votes (Like | Disagree)
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