Microsoft is a company that is quickly transforming itself from a software company, to a services company and its acquisitions and layoffs have shown that to investors. On Wednesday, Microsoft went through more changes, and announced 7,800 layoffs and a change to their core phone business.
With Microsoft going through a number of layoffs in the past year, Microsoft is quickly becoming a leaner company, and one that Satya Nadella is taking charge of quickly. With its layoffs occuring mainly in the phone business, Microsoft is realizing that Windows Phone might be dying soon.
7,800 Layoffs and Chargedown
In his announcement to this staff, Satya Nadella stated that Microsoft will be both laying off a large number of employees, and also writing off $7.6 billion, which largely has to do with the Nokia purchase. Microsoft had 118k employees as of March, and will be down to 110k by the end of the announced layoffs.
The company realizes that the Nokia purchase made by Steve Ballmer and others, wasn’t the right business decision, and is getting out of that deal as quickly as they can. Unfortunately, it’s at the cost of a large number of employees, and will cost the company a large chunk of money at the same time.
Windows Phone Exit Ahead?
In addition to the layoffs and large writeoff, Satya Nadella stated in his email, that he wants to focus their phone efforts in the near term. It wants a more effective portfolio of phones, and wants three customer segments. Those being best management, security, and productivity for all users.
This means largely that Microsoft will be focused on Windows Phones that either court the low end user or the high end user. It could mean a flagship phone later this year as well. Microsoft saw Stephen Elop and Jo Harlow exit earlier, and is narrowing down Windows Phone for success.
Nokia wasn’t the greatest purchase for Microsoft. Now, they are separating themselves from it as quickly as they can.