Microsoft Decision To Cut 7,800 Jobs in Its Phone Business Not Taken ‘Lightly,’ CEO Says

Microsoft’s decision to cut up to 7,800 jobs over the next few months in the restructuring of its mobile phone business was not taken “lightly," given that the cutbacks "affect the lives of people who have made an impact at Microsoft,” CEO Satya Nadella said in an email to employees Wednesday in which he addressed them as "Team." Microsoft is "deeply committed to helping our team members through these transitions,” he said. Microsoft will take a $7.6 billion impairment charge “related to assets associated with the acquisition of the Nokia Devices and Services business,” in addition to a restructuring charge of about $750 million to $850 million, he said. “I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.” Microsoft’s plans for the “near term” are to “run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group,” he said. “We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software.” Of those three segments, business customers will get “the best management, security and productivity experiences they need,” while “value phone buyers” will get the communications services they want, and “Windows fans the flagship devices they’ll love,” he said. Longer term, Microsoft smartphones “will spark innovation, create new categories and generate opportunity for the Windows ecosystem more broadly,” he said. “Our reinvention will be centered on creating mobility of experiences across the entire device family including phones.”