Microsoft Stepping Even Further Away From Mobile
Holly Goodman | May 28, 2016, 7:12
Microsoft Corporation (NASDAQ:MSFT), looks like, is done with the Nokia acquisition and its phone business, as the company is writing off an additional $950 million to add to the $7.6 billion written off previous year for the counterproductive acquisition of Nokia, as it gears itself up for getting rid of the phone business.
"We are focussing our phone efforts where we have differentiation - with enterprises that value security, manageability and our Continuum capability, and consumers who value the same", Satya Nadella, CEO, Microsoft said. He also denied the notion that Microsoft is abandoning the smartphone sector altogether, saying instead that it's "scaling back" as the Redmond outfit continues its mission of building a universal Windows 10 foundation across different device categories. Last July, Microsoft also cut 7,800 jobs and took a US$7.6 billion writedown on Nokia.
Although Microsoft indicated it would continue to develop the Windows 10 platform and support its Lumia smartphones, the firm's chief shop steward in Finland, Kalle Kiili, said Microsoft would no longer produce new phones.
These layoffs and charges are in addition to the 7,800 job layoffs and $7.6 billion write-off at the unit announced previous year.
Executive Vice President of Microsoft's Windows Group, Terry Myerson, in an email to the employees, confirmed that the company is not backing out of the mobile phone division, but only rescaling it. Most of the layoffs will affect employees at Microsoft's Mobile division in Finland, with 1,350 job losses there and 500 globally.
Despite the uninspiring trend of job cuts and sold businesses, Microsoft's stock has reportedly shot up by 1.5% following the recent announcement.
Nokia was the world's leading mobile phone maker from 1998 until 2011 when it bet on Microsoft's Windows mobile platform, which proved to be a flop.
However, the bet has not paid off for Microsoft, which now has less than one per cent share of the global smartphone operating systems market.