Microsoft has announced that it will cut up to 7,800 jobs, mostly in the company’s phone hardware business. The company is also writing off $7.6 billion related to its acquisition of Nokia’s phone business despite only spending $7.2 billion to acquire it last year.
“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,” said CEO Satya Nadella in a memo to employees.
“In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group. 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. We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love.”
About a year ago, Nadella announced a significant shakeup and set in motion the company’s biggest-ever job cuts – 18,000 in 12 months.
“I deeply appreciate all of the ideas and hard work of everyone involved in these businesses, and I want to reiterate my commitment to helping each individual impacted,” he said
Last month, Microsoft sent around 100 Bing maps data collection engineers over to Uber.
“We will continue to source base mapping data and imagery from partners. This allows us to focus our efforts on delivering great map products such as Bing Maps, Maps app for Windows and our Bing Maps for Enterprise APIs,” said Nadella in today’s memo.
Around the same time, Microsoft and AOL announced a huge agreement which saw AOL assume management and sales responsibilities for all of Microsoft’s display, mobile, and video ad inventory.
Of that, Nadella writes:
“We also announced our decision to sharpen our focus in advertising platform technology and concentrate on search, while we partner with AOL and AppNexus for display. Bing will now power search and search advertising across the AOL portfolio of sites, in addition to the partnerships we already have with Yahoo!, Amazon and Apple. Concentrating on search will help us further accelerate the progress we’ve been making over the past six years. Last year Bing grew to 20 percent query share in the U.S. while growing our search advertising revenue 28 percent over the past 12 months. We view search technology as core to our efforts spanning Bing.com, Cortana, Office 365, Windows 10 and Azure services.”