Earlier today a rumor spread that Microsoft will announce a major work force reduction in the coming weeks. Microsoft did not wait that long and just made an announcement. The Redmond based technology company is laying off up to 7,800 employees. The restructuring mostly affects the company’s phone hardware business.
Microsoft will also record an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services (NDS) business in addition to a restructuring charge of approximately $750 million to $850 million.
“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,” Nadella said. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”
The actions associated with today’s announcement are expected to be substantially complete by the end of the calendar year and fully completed by the end of the company’s fiscal year. Microsoft will have more information about these charges in Microsoft’s fourth-quarter earnings announcement on July 21, 2015.
Microsoft struggles to make the Windows phone business work. The market share of Windows smartphones is still far behind Android and Apple’s iOS. Windows 10 could and needs to change that. Windows 10 will launch end of the month. The first Windows 10 smartphones are expected to be released in Fall.
Originally posted in i4u News