Microsoft has announced it will be cutting 7,800 jobs in the phone segment of the company, taking an upwards of $7 billion in charges as it tries to recover its losses in the smartphone industry, making this one of the the largest of Microsoft’s job cuts. Jobs were also cut last year, and all of this comes in the wake of the company assertively pushing themselves into the cellular market.
Microsoft’s Job Cuts
Satya Nadella, Microsoft Company C.E.O. said Wednesday that the majority Microsoft’s job cuts would be coming from the Nokia deal that was made just two years ago. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility,” Nadella said.
The company will not stop the production of smartphones, however, the hardware part of the industry is no longer the company’s main focus. According to the email Nadella sent his employees, the company plans to sell its mapping service to Uber, as well as its mobile display business to AOL.
Microsoft’s Recent Struggles
Microsoft has really been struggling with its cell phone business lately, due to its competition in an industry that is dominated by Android and iPhone operating systems and their users; therefore the company has been making changes everywhere. It was also reported last month that Nokia’s top boss acquired in the transition, Stephen Elop, was leaving the company, so it seems that they are just in a downward spiral currently. They’re hoping that these changes and this new direction will bring the company back into the competition in the smartphone market. They aren’t out of the water yet though; due to the public struggles of the company, Microsoft is also dealing with shares falling lower in trade, sliding below their average causing traders to believe they will continue to fall.
A New Direction for Microsoft
Microsoft’s job cuts are creating a significant change that suggests Microsoft is about to drastically change their strategy where the phone industry is concerned, and this could eventually mean more competition in the phone software market. Forbes tells us that Microsoft plans to focus on a “few specific types of customers; business users that are seeking strong management and security, buyers looking for inexpensively priced phones, and their users who are already heavily invest in the Microsoft name and products.”