Microsoft writes off $7.6 billion from Nokia deal, announces 7,800 job cuts
Microsoft CEO Satya Nadella didn't waste any time dropping the company's previous focus on "devices and services" after he was appointed as chief executive last year. In recent weeks former Nokia CEO Stephen Elop has departed Microsoft, alongside the company's head of phones Jo Harlow. Nadella warned of "tough choices in areas where things are not working," and it appears we're seeing the first major signs of that today. Microsoft is cutting 7,800 jobs primarily in its phone business, and the company is writing off $7.6 billion related to its acquisition of the Nokia phone business. That's more than the $7.2 billion Microsoft paid for Nokia's phone business last year.The new job cuts follow 18,000 over the past 12 months that Nadella originally announced nearly a year ago. Microsoft completed the majority of those cuts back in April, so these new reductions are part of the company's new financial year.
It's not immediately clear what a "more effective and focused phone portfolio" means for the future of Microsoft's Lumia phones, but with the exit of Elop and Harlow it's clear Microsoft isn't as focused on creating a big spread of Lumia devices anymore. Microsoft is planning two new high-end Lumia devices for its Windows 10 Mobile software later this year, but we're unlikely to see the high number of mid- and low-range devices that Nokia used to produce regularly. Nadella says he's committed to first-party devices like phones, but that the company will focus on three areas: business, value phones, and flagships. It sounds like there will be a lot less Lumia devices produced in the future as a result.