Microsoft announces yet another round of phone-related layoffs, $950 million restructuring charge
Things have gone from bad to worse to near-cataclysmic for Microsoft’s mobile phone-designing and manufacturing business of late, with the $7 billion acquisition of Nokia’s entire consumer hardware expertise back in 2014 yielding massive financial losses rather than the expected gains.
Windows Mobile is a lost cause, although Redmond insists it hasn’t altogether given up on the sub-1 percent OS just yet, high-end Lumias don’t seem to be selling very well even heavily discounted, whereas the forgotten feature phone division should soon be discarded for peanuts.
But perhaps most tragically of all, Microsoft confirms today what was rumored for a while, namely that 1,850 “good” employees will follow the 7,800 smartphone hardware workers given the pink slip last year, resulting in another huge impairment and restructuring charge of approximately $950 million, after incurring previous fees and write-offs of no less than $7.6 billion.
In this latest dramatic cutback session, 1,350 jobs are slashed at Microsoft Mobile Oy in Finland (as if the country didn’t suffer enough from Nokia’s downfall), with an extra 500 global positions eliminated. Still, CEO Satya Nadella continues to try to convince the world (and himself) there’s enough workforce left and room in the market for both enterprise and consumer products with an eye on security, manageability and Continuum capability.
In other words, it’s probably time to bid adieu to the Lumia brand (unless Foxconn can get its hands on it), with a nichey Surface Phone (or two) likely in the pipeline as Microsoft’s long overdue mobile hardware swan song.
Terry Myerson, the company’s executive vice president of the Windows and Devices Group, confirms as much in an internal memo sent to surviving employees, saying “we need to be more focused in our phone hardware efforts”, and mostly pursue software development and innovations. Sad but extremely predictable.