Dive Brief:
- Microsoft Corp. has announced plans to restructure the company’s phone hardware business to better focus and align resources, according to the company, which also announced the reduction of up to 7,800 positions, primarily in the phone business.
- The tech giant says this latest layoff is part of recent moves by Microsoft to better align with company priorities.
- Those moves included recent changes to Microsoft’s engineering teams and leadership, plans to transfer the company’s imagery acquisition operations to Uber, and shifts in Microsoft’s display advertising business that enable the company to further invest in search as its core advertising technology and service.
Dive Insight:
Microsoft CEO Satya Nadella, in a statement to employees, said: “We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family. In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”
CNET says that the new layoffs are in addition to the 18,000 employees that Microsoft said it planned to lay off a year ago, according to sources who spoke to the New York Times, which earlier reported on the impending layoffs. Most of those cuts were targeted to the struggling Nokia division as well. The company has also been busy lately trimming some of its top management. In June, Microsoft announced that Stephen Elop, the former CEO of Nokia who headed Microsoft's devices group, was leaving the company. Joining him on the exit line was former Nokia executive Jo Harlow, who reported to Elop.
The new round of layoffs had been expected. In an email distributed to employees last month, Nadella mentioned the need to make some "tough choices," a phrase that often implies upcoming job cuts. For HR, it's a perfect example of how no matter what you do to make your company a great place to work, market forces and business strategies always take priority. In this case, Microsoft bet on being a smart phone player, but that decision didn't work out. So the workforce pays the price.
