Microsoft continues to struggle with its Nokia phone acquisition and on Wednesday announced that it will cut 7,800 positions in that division and take a $7.6 billion write-down on assets related to the acquisition.
“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,” chief executive officer Satya Nadella said in a statement. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”
The company will take a restructuring charge of about $850 million. Nokia has been a troubled buy foisted on the company by its former CEO Steve Ballmer who was playing catch-up in the mobile devices business after missing the early bus.
Microsoft basically overpaid for the company — $9.4 billion — which had once dominated the mobile phone business but had lost the smartphone race to Apples and Samsung. These staff cuts come less than a month after Nadella’s rejig of his top leadership team which included Nokia CEO Stephen Elop.
The cuts announced on Wednesday are in addition to the 18,000 employees Microsoft planned to let go a year ago.
Satya said: “We’ll bring to value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love.”