Microsoft is planning to cut as many as 7,800 jobs, or nearly 7 per cent of its total workforce, related to its smartphone operations. Most of the lay-offs are linked to Nokia, former Finnish mobile giant, which the company bought in 2014.
Microsoft bought Nokia's handset business for $9.5 billion.
What went wrong?
The announcement of job cut was made through a memo. Microsoft CEO Satya Nadella said that the company is planning to cut down its handset business. The words used were "restructuring", "effective and focused", and "long-term reinvention and mobility". Microsoft claimed that it has lost $7.6 billion of the total value of the deal with Nokia.
Has Microsoft given up on handset business?
Microsofts's announcement is being seen as an acceptance of its failure to revive the Windows phone share worldwide. Under Nadella, Microsoft had been trying to incorporate flagship services like Outlook and Word to other mobile platforms. It even made an attempt to enter the low-range and mid-range smartphone market which is dominated by players like Samsung, Micromax, and HTC . But it had few takers.
It seems that Microsoft is not entirely out of the smartphone game. Reports suggest that it is planning to make a Surface Phone. Nadella mentioned in his memo that "Windows fans the flagship devices they'll love". It is clear that something is brewing inside Microsoft's Redmond office.