Microsoft Announces Mobile Restructuring With Up To 7,800 Job Cuts
by Brandon Chester on July 8, 2015 5:05 PM EST- Posted in
- Smartphones
- Microsoft
- Nokia
- Mobile
A little more than a year ago Nokia officially ceased to exist as a mobile phone manufacturer. Nokia's efforts to reverse their decline in the mobile space by adopting Microsoft's Windows Phone operating system were unsuccessful, and eventually the company decided to exit from the mobile phone market entirely by selling their devices business to Microsoft. Former Microsoft CEO Steve Ballmer had stated that Microsoft was evolving from a traditional software company to become a devices and services company. With that mindset, the acquisition of Nokia made sense in order to acquire manufacturing, design, and software talent that had already been working on Windows Phones for quite some time.
Unfortunately, it appears that the purchase of Nokia's devices division has not worked out as well as Microsoft had hoped. New CEO Satya Nadella has also reversed course on the Devices and Services mantra and is instead focusing on software and services, but with first party hardware to showcase the software. After laying off 12,500 former Nokia employees last year, Microsoft has announced that will be eliminating up to 7,800 positions, with most of the cuts coming in areas of Microsoft focused on phones. In addition to the job cuts, Microsoft will be writing off 7.6 billion dollars which is essentially the entire value of the Nokia acquisition. There will also be a $750-$850 million restructuring charge. All-in-all, it's a big hit to their bottom line, and even companies that make billions every year have to answer to investors about charges like this. It is an even bigger write down than they took on the AQuantive deal a few years ago.
In an email to employees regarding Microsoft's future in the mobile business, CEO Satya Nadella stated “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.” One could interpret this as Microsoft consolidating their phone lineup which has arguably become a bit too large and filled with devices that only differ from each other in small ways. It's likely that the launch of Windows 10 for phones will be accompanied by more information about the future of Microsoft's phone business, but for the time being it appears that Microsoft is taking a step back from their role as a major devices company.
Source: Microsoft
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texadactyl - Friday, July 10, 2015 - link
I have to agree with your "personal bias" remarks and I am a Linux software engineer. Evolution is normally a function of economics as an offset to new capability (you get this at what price). The cost of corporate migration combined with human short term thinking/planning usually provides enough inertia to discourage any wholesale changes.nikon133 - Sunday, July 12, 2015 - link
I also think that their core business - being so deep into corporate/government/... is much safer than anything Apple and Android can even dream about. If any of those two runs out of fashion, they will suffer a lot. MS cannot run out of fashion - MS was never in fashion. But while replacing MS Servers and services is possible in theory, effort required to do complete IT infrastructure resurrection is so huge it is all but impossible in real life. They have managed to elevate (at least) that level of their offerings a necessity, while iPhones, iPads and Android gadgets are still just a commodity, and fancy as they are, they are still much easier to swap with the next best thing, should such products emerge.Re Windows phones. I believe that decentralization of MS in the past has caused them to be unable to play on their best cards, but I also think that new CEO just might change that. With some thinking and, maybe, iron hand, MS can make Windows phone much more attractive to everyone who is using Windows PC at work and/or at home, by creating platform with in-house integration that Apple and Google cannot reach, being outsiders. They have failed to maximize on that opportunity under Balmer, but even as is, Windows phone does move close to 40 million units a year, which is at least sustainable if not runaway success, and something worth building upon. We can think of it as MSs "hobby", such as AppleTV and AppleWatch are for Apple.
I think that Win phone is here to stay. They might have missed opportunity to make it into Windows PC equivalent in mobile world, but they will grow to competitive levels in following years. they have money, they have patience, they have tech and patents... and they don't have anywhere else to go on laptop/desktop/server markets, being at the top already.
I just hope they will significantly reduce number of Lumia SKUs available. One Lumia 5xx, one Lumia 7xx and one Lumia 9xx should be all that is required each year.
Michael Bay - Thursday, July 9, 2015 - link
>muh solipsismAside from that, wearables are dead as in dead, your imaginary war is fought by zombies with no future whatsoever.
Impulses - Wednesday, July 8, 2015 - link
It'd be sad to see them back away from the phone market, tho it does seem like they have a glut of low end & midrange models. To me it seemed like there was still room for a third player, and they clearly have the capital to sustain it, seems maybe investors don't care for that. As an Android user, WP was always more appealing than iOS...JeremyInNZ - Wednesday, July 8, 2015 - link
Not sure why... As an iOS and Android user, I would pick MS last. The advantage of iOS is ease of use, stability, and a slightly better app support over Android. The advantage of Android is better hardware options, and more customization. Moving to Microsoft is taking the worst of both worlds. Poor App support in a locked system, with limited hardware options.Impulses - Wednesday, July 8, 2015 - link
There's still more choice of hardware than with iOS (or there was before WP started fading into obscurity and Apple started selling phones in more than one size), and the OS itself straddled the line in a similar way. Glass half full half empty I guess... I've used iOS plenty too FWIW (at work and via an iPod touch).Samus - Thursday, July 9, 2015 - link
Poor phone selection, poor carrier adoption, and no apps.AT&T is basically the exclusive carrier for Nokia. You can get one unlocked for T-mobile. Last I checked the only WinMo phone T-mobile carried was the HTC 8XT. Verizon and Sprint don't seem to have any WinMo phones in their stores.
But even if you buy that bad-ass Lumia 930 on AT&T, outside of the Tier-1 apps, there's nothing. Facebook, Twitter, Netflix, Office, yes.
Tapatalk, Google Maps, and accessory support are the real problem for me. There is no smartwatch support unless you get that funky Microsoft band and I am a watch person.
jakoh - Thursday, July 9, 2015 - link
the band is not funky. its cool, its the future, get on it.Alexvrb - Saturday, July 11, 2015 - link
I use HERE maps and it works pretty darn well. I love having the entire country offline like a dedicated GPS. Those who insist on Google maps or bust will literally be impossible to please in any way shape or form, so there's no point there. Even if you had every other necessary app. Google is locking people in almost as well as Apple these days. Anyway, regarding Tapatalk? Been on the platform for a while now. Heck nowadays Tapatalk has a newer Universal app that works on Windows Phone as well as other versions of Win8, and that extends to Win10 on multiple form factors. The "No app" argument is increasingly fading for typical use, but that won't stop it from getting regurgitated ad nauseam by carrier sales personnel.Regarding smartwatches... still a niche product, I think. I'm not even interested in something like the MS Band at this point. Personally I wear a Seiko non-smart watch with synthetic sapphire and have minimal interest in a watch I have to plug in often. Maybe when someone comes out with a really nice next-gen e-ink model that lasts for a week? Needs to resist scratches - I'd settle for GG3+. Frankly I'd have to disable any sort of text message notifications on one immediately because I really don't want incoming messages displayed publicly (especially while at work). Just my opinion, obviously, and no offense to those who can't live without smartgear.
nikon133 - Sunday, July 12, 2015 - link
I do miss street view on Here maps on occasion (I don't think they have any street view here in NZ), but in general they work great, country-wide offline cashing is excellent, speed limits are accurate. Do Google Maps show speed limits in SatNav mode, these days? I was told by Android using friends they don't, but that was some time ago.