Redmond-based tech giant Microsoft has today confirmed plans to cut up to 7,8000 jobs, with the layoffs primarily stemming from the company’s struggling mobile division. It’s understood the Xbox and HoloLens arms remain unaffected.
Today’s announcement comes off the back of a $7.6 billion loss in profits coming as a result of the Nokia acquisition from two years ago and the deal’s various assets. These redundancies will spur a restructuring effort from within Microsoft itself, and here, in a press release, the publisher outlined the ramifications of the financial woes.
“As a result, the company will 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,” Microsoft explained.
Satya Nadella, CEO of Microsoft, shed further light on the consequences of the layoffs, and how this will ultimately force the company to review its phone portfolio on the eve of Windows 10’s consumer release.
“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.”
Despite its aggressive strategy in 2013, Microsoft‘s goal to make a dent in the hyper-competitive smartphone market has been met with setback after setback. At the time of writing, Nokia only holds 2.5% market share and is effectively dwarfed by Android and Apple. How exactly today’s news will affect the company’s flailing status will only be revealed in time.