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Technology Stocks : Microsoft: The Devices and Consumer Segment
MSFT 442.80+1.3%3:59 PM EDT

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From: Eric L7/9/2015 8:32:36 AM
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Microsoft writes-off Nokia purchase and Lays-off more employees ...

>> Microsoft writes-off Nokia purchase with massive layoffs ahead of Windows 10

Most of ex-Nokia staff set to go bye-byes

Chris Merriman
The Inquirer
Wednesday July 08 2015

theinquirer.net

Microsoft has confirmed a major round of job cuts in its hardware (ie ex-Nokia) division.

The news, which arrived as speculation from The New York Times, has now been confirmed with the culling of a 7,800 roles, in addition to the 18,000 Microsoft cuts already made last year.

This night-of-the-long-knives is centred in the hardware division, which reflects the already acknowledged shortfall in the success of Microsoft's Lumia (Nokia) and Surface brands.

Neither has turned out to be the disruptive force that that the company had hoped and it now looks as if the company is preparing to take a step back from design, instead buying in products from companies like, believe it or not, Nokia, which recently confirmed a return to the mobile game.

In an e-mail to employees today, CEO Satya Nadella said, "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.

"In the near-term, we'll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."

Steven Elop, the Nokia CEO who came as part of the $7.2bn deal, left the company last month as the Windows Phone platform continued to lose ground to Android and iOS.

In addition, the company has confirmed that it will write off $7.6bn in the next quarter, reflecting the failure of the purchase - nearly half a billion dollars more than it paid.

Microsoft recently divested its display advertising business to AOL, with the transfer of 1,200 roles, but it is expected that many of these too will be made redundant once the merger is completed.

These employees have been given until 16 July to accept their tenure with AOL come what may.

Nadella gave a rallying cry to his troops in the form of an email in June, but warned that the company would have to "make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value". That prediction has most definitely come to pass.

The news comes three weeks out from the start of a new era for Microsoft's flagship Windows product as the company moves to an as-a-service model, removing large swathes of the existing licensing that has become hugely unpopular as free alternatives such as Chrome OS and Linux become more palatable.

Microsoft failed to crack the 20 percent barrier with its current Windows 8, and there was much criticism of the hybrid Metro/modern/tiled/shambles UI.

Today's announcement will act as a profits warning to shareholders ahead of fourth quarter earnings which will be declared on July 21st. µ # # #

- Eric L. -
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