Microsoft is gutting its Windows Phone hardware business
Remember that time Microsoft’s Steve Ballmer openly laughed at the iPhone? Well, it turns out the phone business isn’t so easy after all, because for the second year in a row Microsoft has announced it’s laying off large numbers of people — this time mainly involved with Windows Phone hardware.
Despite cutting a total of 7,800 jobs, however, Microsoft insists it’s not throwing in the towel on its Windows Phone division, and still plans to push forward with Windows 10 Mobile and launch new Lumia flagship devices later in 2015.
The job cuts are likely to be completed by the end of fiscal 2016, meaning June 30 next year. It is possible, although not confirmed, that Microsoft will outsource its manufacturing, but continue to brand the devices as Microsoft-made.
The company is also taking a $7.6 billion write-down related to its acquisition of Nokia, alongside a restructuring charge of between $750 million to $850 million.
In an email to employees, CEO Satya Nadella wrote that Microsoft “in the near term … [will] run a more effective and focused phone portfolio.” This will be based on appealing to businesses, value-phone buyers and flagship phone customers.