After selling off its smartphone hardware unit, Microsoft had previously decided to lay-off 1,850 personnel to streamline its phone business. But reports pouring in today seem to suggest that Redmond is back at cutting off more people from its company.
According to an SEC filing, Microsoft is adding about 2,850 more people to the reported 1,850 lay-offs it had announced a ,couple months ago. So, Redmond will now cut a total of 4,700 jobs worldwide, and that too by the end of the current fiscal year, 2017. Today’s surprise job cuts will include personnel mainly from the company’s smartphone business, but will also encompass some people from the global sales unit.
Talking about the same, Microsoft in the regulatory filing quoted that,
In addition to the elimination of 1,850 positions that were announced in May 2016, approximately 2,850 roles globally will be reduced during the year as an extension of the earlier plan, and these actions are expected to be completed by the end of fiscal year 2017.
Microsoft — the maker of Windows OS — has found it difficult to find a stable ground for its smartphone business, ever since the acquisition of Nokia’s hardware business for $7.6 billion in 2014. The company has continued to streamline and bolster its efforts to improve upon the smartphone category since mid-2015. It has previously announced that it would cut 7,400 jobs from the phone business unit.
The regulatory filing also sheds some light onto the number of Lumia’s sold and the revenue related to the same in the current quarter,
Phone revenue decreased $4.2 billion or 56%, as we sold 13.8 million Microsoft Lumia (“Lumia”) phones and 75.5 million other phones in fiscal year 2016, compared with 36.8 million and 126.8 million sold, respectively, in fiscal year 2015.
But, if you’ve seen the current trend, Microsoft is now focusing its attention towards building and offering Windows 10-as-a-service. Windows phones had less than 1 percent of the global smartphone market in the first quarter, according to Gartner. In order to get out of this struggling business, Nadella has also placed immense focus on business, cloud and big data services, specially Azure. Redmond has recently also acquired professional business social network LinkedIn for an all-cash deal of $26.2 billion.
Nokia Division Sold
And if you’re unaware of this fact, then where have you been! Microsoft has recently sold off part of the mobile hardware business that it acquired from Nokia back in 2014. The feature phone business has been acquired by Finland-based Foxconn Technology subsidiary, FIH Mobile Ltd. and HMD Global,Oy for a meagre sum of $350 million.
According to this deal, Redmond had agreed to transfer all core assets, including software, brand, services and even the care network. It had also agreed to send over about 5,400 personnel who were previously involved in the phone hardware business. This has also led to the hope that Nokia could make a return to the smartphone business, with Android powering its devices, instead of Windows 10.
With the hefty amount of job cuts in the current fiscal year, it seems that Microsoft has gaged the market sentiment and is trying to get out of the smartphone business, once and for all. But, there has been rumors that the company will still manufacture and produce smartphones, maybe under the moniker – Surface Phone.
