Microsoft is reportedly planning to lay off as much as 7,800 employees amid its own struggles to keep up in a rapidly evolving technology industry.
Prior to the official company announcement, the New York Times, which cites unnamed sources who say Redmond is planning to announce the new round of job cuts as early as Wednesday.
The upcoming layoffs will reportedly affect Microsoft's hardware group, which is home to its ailing smartphone business it purchased from Nokia for $7.2 billion in September, among the other businesses that will be affected by the layoffs.
Microsoft issued an official announcement Wednesday morning:
"Microsoft Corp. today announced plans to restructure the company's phone hardware business to better focus and align resources. Microsoft also announced the reduction of up to 7,800 positions, primarily in the phone business. 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," the company stated.
This is separate from the 18,000 job cuts that Microsoft announced in July 2014 as then-new CEO Satya Nadella's first order of business when he replaced Steve Ballmer. Last year's layoffs was said to be the biggest in Microsoft's 40-year history, and it affected mostly the Nokia employees that were turned over as part of the acquisition.
It is not surprising for Microsoft to make yet another round of layoffs. As Nadella told employees in a company-wide email obtained by GeekWire in late June, Microsoft is consolidating its businesses and is taking a renewed focus on the parts that are performing well: productivity, the cloud and personal computing. That means it is also looking to cut out the parts that aren't doing so well.
"We will need to innovate in new areas, execute against our plans, make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value," Nadella said.
Also in June, Microsoft has handed over its web display advertising business to AOL, a component which the firm previously had high hopes for. In return, Microsoft was able to convince AOL to use Bing as the default search engine for AOL's websites, including The Huffington Post, TechCrunch and Engadget.
This was just after Nadella oversaw a shakeup in Microsoft's upper management ranks, during which Terry Myers was assigned to take charge of both the Windows group and the struggling smartphone business, while Stephen Elop, former Nokia CEO who was then head of the smartphone division, left the firm.
It remains to be seen how Myers plans on overhauling Microsoft's smartphone business. Looking over Windows is a hard enough job, but Nadella seems to have high hopes in him. However, Myers has a lot of work to do as Windows Phone continues to lag far behind the leading mobile platforms, Android and iOS.
"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," Nadella said.
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