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Microsoft Making New Shift; Laying Off 7800 in Phone Division; Nokia Purchase Write-off


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The latest moves from Microsoft almost look like the company is throwing in the towel in the battle against the iPhone and Android smartphones. It turns out that Ballmer and Elop's last move for Microsoft to buy Nokia will have cost the company billions of dollars. In 2013, Microsoft purchased Nokia's hardware division for $7.2 Billion USD, but now the company will soon account for this purchase as a massive write-down on their financials. On top of that, Microsoft is also planning another round of layoffs to the tune of 7,800 people across the globe. A majority of these layoffs will be in Microsoft's mobile phone division.

Despite this seemingly desperate news, Microsoft isn't actually giving up on smartphones. Instead they are refocusing on the Windows ecosystem, and will be using future mobile devices to push their services and products. Basically, instead of trying to compete in the regular consumer mass market, Microsoft will narrow their attention to three distinct markets: enterprise and security, value phones, and a flagship phone for Windows fans.

Microsoft's CEO, Satya Nadella released the info in an email this morning. One of the things he specifically mentioned is that the company is "committed to our first-party devices including phones". He also said, "...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." At the end of his email he added, "I know many of you have questions about these changes. I will host an employee Q&A tomorrow to share more, and I hope you can join me."

We are curious to see the details of Microsoft's new strategy. Regardless, it looks like it is still tough for Microsoft to live-down Ballmer and Elop's "legacy" of mistakes. You can read the full email at the source link below.

Source: Microsoft