By: Tech Desk | Published:July 29, 2016 9:39 am
Microsoft is cutting down 2,850 jobs, in mobile and sales team. (Source: Reuters)
Microsoft says it is cutting 2,850 jobs, about 2.5 percent of its workforce, as it further scales back its troubled smartphone business. A spokeswoman says the layoffs will mostly affect workers in the company’s smartphone hardware operation and related sales teams. She declined to say which geographic locations would be affected but said many of the laid off workers had already been notified.
Microsoft Corp disclosed the planned job cuts in a regulatory filing, which said they’re in addition to 9,250 previous layoffs, primarily affecting the company’s phone business, over the last 12 months.
The giant tech company reported earlier this month that its revenue fell 9 percent in the previous 12 months, but its net income grew 38 percent as it shed unprofitable operations like the phone business.
In May 2016, Microsoft announced plans to further restructure the struggling Lumia smartphone business, which included close to 1,850 job cuts. The new 2,850 job cuts will be in addition to this earlier number that was announced in May. Microsoft had furthered record an impairment and restructuring charge of approximately $950 million, of which approximately $200 million would relate to severance payments at the time.
“We are focusing our phone efforts where we have differentiation — with enterprises that value security, manageability and our Continuum capability, and consumers who value the same. We will continue to innovate across devices and on our cloud services across all mobile platforms,” Satya Nadella, Microsoft CEO had said at the time.
Microsoft had also recently sold of its remaining feature phone business (which it had acquired when it bought Nokia) to Foxconn subsidiary FIH Mobile Limited (FIH).
Microsoft’s smartphone business has struggled and failed to do well against the might of Android or iOS. The Redmont-based software company hasn’t launched any new products in the smartphone segment for sometime now, and chosen to concentrate on Windows 10 services, Cloud infrastructure, among other things.
However, reports have claimed Microsoft is planning to launch a Surface smartphone. According to a Windows Central report from April 2016, the Surface Phone will come in three different variants based on pricing and markets. and will mean an end for the Lumia line. Meanwhile, Nokia is preparing to release two new smartphones this year. Nokia’s smartphones are to be manufactured by HMD Global, which now holds license to sell Nokia branded smartphones for the next 10 years.
