Menu
Microsoft pulls back from phone business, announces 7800 layoffs

Microsoft pulls back from phone business, announces 7800 layoffs

Microsoft will write off the entire value of the smartphone business it acquired from Nokia

Microsoft is scaling down its mobile phone activities, writing off the entire value of the former Nokia smartphone business it bought last year and laying off almost one-third of that business' staff.

The company will no longer try to build a standalone phone business, but instead plans to build a Windows ecosystem that includes its own devices, CEO Satya Nadella told staff in an email announcing the changes.

Up to 7800 jobs will be cut, most of them in the phone business. The cuts come in addition to 18,000 layoffs announced last year: Those cuts included around half of the 25,000 staff who joined Microsoft from Nokia.

Microsoft also announced plans to write down the value of its Nokia acquisition, recording an impairment charge of $US7.6 billion. It bought the Finnish company's devices and services business only last year for $7.2 billion.

The company explained the write-down by saying that it's restructuring of the phone business meant that its future prospects were below original expectations. Its Lumia phones are languishing with a single-digit market share, and the company has produced no break-out successes to rival flagship phones from Samsung Electronics or Apple.

The layoffs should happen by year end, Microsoft said, adding that it would provide more information about the impairment charge in its fourth-quarter earnings announcement on July 21.

Peter Sayer covers general technology breaking news for IDG News Service, with a special interest in open source software and related European intellectual property legislation. Send comments and news tips to Peter at peter_sayer@idg.com.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags business issuespersonnelconsumer electronicsMicrosoftsmartphones

Featured

Slideshows

Educating from the epicentre - Why distributors are the pulse checkers of the channel

Educating from the epicentre - Why distributors are the pulse checkers of the channel

​As the channel changes and industry voices deepen, the need for clarity and insight heightens. Market misconceptions talk of an “under pressure” distribution space, with competitors in that fateful “race for relevance” across New Zealand. Amidst the cliched assumptions however, distribution is once again showing its strength, as a force to be listened to, rather than questioned. Traditionally, the role was born out of a need for vendors and resellers to find one another, acting as a bridge between the testing lab and the marketplace. Yet despite new technologies and business approaches shaking the channel to its very core, distributors remain tied to the epicentre - providing the voice of reason amidst a seismic industry shift. In looking across both sides of the vendor and partner fences, the middle concept of the three-tier chain remains centrally placed to understand the metrics of two differing worlds, as the continual pulse checkers of the local channel. This exclusive Reseller News Roundtable, in association with Dicker Data and rhipe, examined the pivotal role of distribution in understanding the health of the channel, educating from the epicentre as the market transforms at a rapid rate.

Educating from the epicentre - Why distributors are the pulse checkers of the channel
Kiwi channel reunites as After Hours kicks off 2017

Kiwi channel reunites as After Hours kicks off 2017

After Hours made a welcome return to the channel social calendar last night, with a bumper crowd of distributors, vendors and resellers descending on The Jefferson in Auckland to kickstart 2017. Photos by Maria Stefina.

Kiwi channel reunites as After Hours kicks off 2017
Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Show Comments