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Microsoft May Cut 1,850 Jobs as Nadella Pares Phone Ambitions

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Linda Schilk
May 25, 2016 09:00
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Microsoft Corp. will cut as many as 1,850 jobs and take a new impairment charge as Chief Executive Officer Satya Nadella pares back the company s ambitions in smartphones.The company will take a $950 million impairment and restructuring charge, including $200 million for severance payments, Microsoft said in an e-mailed statement.

Last July, the company said it planned to cut as many as 7,800 jobs and write down the handset business by $7.6 billion while earlier this month it agreed to sell its feature phone unit.

Redmond, Washington-based Microsoft expects to complete most of the announced actions by the end of 2016 with further details to be released with fourth-quarter earnings in July.

Microsoft sold its feature phone business to FIH Mobile Ltd. and HMD global for $350 million.Windows phones had less than 1 percent of the global smartphone market in the first quarter, according to Gartner Inc. That compares with Android s 84 percent and 15 percent for Apple s iOS.The cuts are a further blow to Finland, which is struggling to reduce unemployment and revive an economy hurt by Nokia s mobile-phone demise.

Nadella has been trying to revitalize the company that was once known mainly for personal-computer software by focusing on Web-based services and productivity applications.

The company is slashing costs and concentrating on Windows 10 to restore growth in PCs.While Microsoft s push into smartphones hasn t worked out as planned, the company continues to develop hardware such as its Surface tablet computers.

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Linda Schilk
May 25, 2016 09:00
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