Wednesday, 20 February, 2019

Microsoft Shares Could Benefit as Company Hangs Up on Phone Business

Sherri Watson | 30 May, 2016, 17:28

MICROSOFT Corp yesterday announced more big cuts to its smartphone business, just two years after it bought handset maker Nokia in an ill-fated attempt to take on market leaders Apple and Samsung.

It's been a grim few days for Nokia/Windows Phone fans. Employees working for Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, are not in scope for the planned reductions.

Microsoft Corp said on Wednesday it will trim down its smartphone business by cutting 1,850 jobs, a lot of them in Finland, and write down $950 million from the operation. There will also be up to 500 additional jobs trimmed worldwide.

Nadella, who initially opposed Ballmer's move into the handset business, hasn't publicly declared a full retreat, saying in a statement that the company "will continue to innovate across devices". It's not like they're going to say "our phone hardware division is dead". Last year, the company eliminated almost 8,000 jobs as part of this effort. We've got only a bit over a month left of development before Microsoft signs off on a "final" build of the Anniversary Update, which will likely be flighted through Insiders first before reaching the public sometime in July.

- Microsoft will cut up to 1,850 jobs and book an approximately $950 million write down as it attempts to salvage its rocky entrance into the smartphone market, the Associated Press reports. The next round of job cuts came a year ago when Microsoft announced an additional 7,800 staff cuts and took a $7.6 billion Dollars write-down on the acquisition.

In a statement Wednesday, Microsoft CEO Satya Nadella said his company is now, "Focusing our phone efforts where we have differentiation - with enterprises that value security, manageability, and our Continuum capability, and consumers who value the same". As a result of this, the Redmond-headquartered company will record an impairment and restructuring charge of approximately Dollars 950 million, of which approximately USD 200 million will relate to severance payments.

Redmond, Washington-based Microsoft expects to complete most of the announced actions by the end of 2016 with further details to be released with fourth-quarter earnings in July.