Microsoft to layoff up to 7800 employees working on smartphones; $7.6 billion write off announced

Microsoft to layoff up to 7800 employees working on smartphones; $7.6 billion write off announced
Over the last week or so, we've chronicled the signs suggesting that Microsoft could be ready to embrace Android and make a hasty retreat from its own mobile OS. Rumors that top brass in Redmond were considering writing off billions of dollars in goodwill was one such sign. Removing the value of these intangible assets would make the phone hardware division easier to sell or spin off.

This morning, rumors intensified following the news that Microsoft was laying off up to 7800 employees, most of them toiling in its smartphone hardware business. As a result of the job cuts, the company indeed announced that it was taking a $7.6 billion write off. The one time charge means that Microsoft will take a hit against its earnings for one quarter, although most investors tend to welcome such news as a sign that a company is removing fat from its businesses.

The only thing that would seem to be preventing Microsoft from making any kind of change in its smartphone division is the impending launch of Windows 10 Mobile. The revised mobile OS is due in September and is expected to add many features to the software that Android and iOS users already enjoy.

This is the second mass layoff under the reign of Microsoft CEO Satya Nadella. The first whack at the payroll was done last year in response to the purchase of Nokia Devices and Services with 18,000 workers given their pink slip. That layoff was precipitated by the acquisition. This one has a much different feel to it.

source: CNN

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47 Comments

1. hafini_27

Posts: 945; Member since: Oct 31, 2013

Hope Wp10 will be successful.

18. medicci37

Posts: 1361; Member since: Nov 19, 2011

It's a shame that a more competent & innovative company doesn't dominate the pc market. With all their billions Nokia purchase, patents & experience it's really pathetic that this is the best Ms can do

23. theguy2345

Posts: 1216; Member since: Jun 24, 2014

And who do you suppose that be? Google, with the closed prison known as Chrome OS? Or Apple, and the overpriced Macs?

34. sgodsell

Posts: 6851; Member since: Mar 16, 2013

If Chrome OS is a closed prison, then Microsoft is the king of closed prison OS's. BTW if you ever used Chrome OS, then you would have known that you could install full Linux as well to coincide with Chrome OS. You probably don't know that Chrome OS is based off of Linux which is the most open. Putting that aside. I think you are angry that your beloved platform of choice which is WP, only has a 2.5% global market share, and has been declining. This is after 5 years. Clearly WP is a dead duck.

37. theguy2345

Posts: 1216; Member since: Jun 24, 2014

That's right, google took open software and made it very closed. How about trying to install another browser on it. Oh wait... And I can install Linux beside any OS, including windows. If I have to install another OS or put it into dev mode to run a program, there is a problem. That's the closed prison. And I think you are angry that windows phone is still around. It just pisses you the hell off that after all these years of low market share, it is still here and not going away anytime soon.

46. hypergreatthing

Posts: 44; Member since: Jun 13, 2012

Why are you saying "closed prison". Do you know of many open prisons to compare it to? There's nothing wrong with a bit of lock in. It helps the non-tech savvy operate in a manner where they can't f**k themselves over. At least they support dev mode to enable superusers to get access to everything they'd ever want to do. What's the equivalent in apple? There is none.

47. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Microsoft made their own bed, now they get to lay in it. Karma caught up with them for that inside job they pulled on Nokia. Funny how their loyalty works, they sent Elop home after ALL HE DID FOR THEM. Idiot doesn't care, though, he gets to go home to the far reaches of northern Canada with all his parachutes he picked up along the way. Truth still hurts. Without Nokia, now nobody outside the jerk cirlce wants Windows Phone. Losing that 2% just got easier....

36. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

They aren't doing anything wrong. They just came to late.

2. theguy2345

Posts: 1216; Member since: Jun 24, 2014

I think they are consolidating their lineup. They don't need all these low end phones. I also believe the surface team may also be converging with them, making a surface phone (personal opinion, but plausible). The write off may seem bad (well, it is bad) but it is smart to start with a new slate with windows 10. And they will never go with android. Ever.

3. dickwyn

Posts: 621; Member since: May 07, 2012

yeah i somehow agree. It's not like WP will appeal to everyone. Focusing on just a couple of devices should be they way

7. theguy2345

Posts: 1216; Member since: Jun 24, 2014

No OS does. Something many android fans don't get. Not everything is going to appeal to everyone, but trying to make it to appeal to as many people as possible is the goal.

4. Derekjeter

Posts: 1455; Member since: Oct 27, 2011

Even after WP 10, Microsoft will keep loosing money. They need to come up with something so revolutionary that will bring buyers to the OS. At this point the only thing that calls attention is the Hardware of the Lumia line and not the software.

16. sip1995

Posts: 1771; Member since: Feb 07, 2014

W10 it's not even here yet..........jeeeeez

31. BobbyDigital

Posts: 2124; Member since: May 29, 2014

Microsoft has been losing money in mobile since forever. With every iteration, they say its going to be the best and bring people to the OS. And with every iteration of Windows for Mobile, no one comes and they lose money. People just don't like Windows for Mobile. They've been rejecting ot for over a decade now.

41. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

All the fans of different platforms. I really don't get why should we care. All the corporate brands care about is lining their own pockets with cheaper labor, higher profits. If this is not a wake up call for people of first world countries, I don't know what is. Why don't you spend your energy bettering your own life? http://www.nytimes.com/2015/06/04/us/last-task-after-layoff-at-disney-train-foreign-replacements.html?_r=0

5. akki20892

Posts: 3902; Member since: Feb 04, 2013

Nokia will hire their engineers.......soon

6. yoosufmuneer

Posts: 1518; Member since: Feb 14, 2015

Please don't abandon Windows phone. Lesser choice, Lesser Competition

35. sgodsell

Posts: 6851; Member since: Mar 16, 2013

Its already a dead platform.

8. noler

Posts: 326; Member since: Aug 19, 2013

" add many features to the software that Android and iOS users already enjoy" This is from Alan (Biased) F. In other words, yes, you need 2 phones, Android and iOS to replace ONE Windows 10 Mobile device. This is how good Windows 10 Mobile. This is also from the Nadella "We’ll bring business customers the best management, security and productivity experiences they need; Value phone buyers the communications services they want; Windows fans the flagship devices they’ll love."

11. Commentator

Posts: 3722; Member since: Aug 16, 2011

I like a good marketing pitch as much as the next guy too!

42. jroc74

Posts: 6023; Member since: Dec 30, 2010

Hey...seeing how MS likes to spin Xbox One numbers its no surprise its rubing off on some of its fans.

25. blazee

Posts: 414; Member since: Jan 02, 2012

You're confused buddy. That statement in quotation says that windows is bringing features ,that already exist on Android and ios. So idk where you get the idea that you need and Android and ios to replace 1 windows phone

30. BobbyDigital

Posts: 2124; Member since: May 29, 2014

Your statement couldn't be more wrong. Please learn to read. What that statement meant was that WP will *FINALLY* be getting features that Android and iOS have had for a while now. A long while.

9. 7thspaceman

Posts: 1597; Member since: Feb 14, 2011

I predict that Windows 10 smart phones will survive. Microsoft will do as Nokia did and get rid of most if not all it's smart phone manufacturing plants and have outside OEM manufacturers make Windows 10 smart phones for Microsoft made to the specification that the Microsoft design teams gives them. Microsoft will also sell less models of Windows smart phones and will at least 3 flagship level Windows 10 smart phones for people to buy. I think MS CEO Nadella is smart enough to know that the if he kills Microsoft smart phones it will hurt "Microsoft's Brand name" so badly that MOST PEOPLE will not want to buy a Microsoft product fearing they will stop making them. The Surface tablets will also continue to be manufactured because it's the only Mobile device that Microsoft has that is selling well they have and had has a strong brand name.

10. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

So, is Windows Phone still on track for that 20% of the mobile market by 2017? /s

13. ihavenoname

Posts: 1693; Member since: Aug 18, 2013

They are lucky even with 5% in 2020 (sad for them but true).

15. noler

Posts: 326; Member since: Aug 19, 2013

Why not, WP is already in 10% in Europe and continues to grow. All this without flagship phone and Windows 10.

17. NexusKoolaid

Posts: 493; Member since: Oct 24, 2011

10% in some countries, less in others. Whether the market share is growing or shrinking also depends on which country you're talking about. I guess that gains had without a current flagship are driven more by low price points than anything else.

32. BobbyDigital

Posts: 2124; Member since: May 29, 2014

10% in some places in Europe. Near ZERO in a lot more places and other countries. Flagship or not, Windows for Mobile does not sell.

38. sgodsell

Posts: 6851; Member since: Mar 16, 2013

So 334.4 million smart phones sold last quarter globally (Q1 2015). 78% went to Android, 18.3 % for iOS, and 2.7% for WP. So that means 9.2 million WP devices sold within 3 months, or from January to the end of March. So that means 269 million smart phones were Android in that same quarter. So basically after 5 years this is all WP can muster up for a market share.

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