Microsoft has revealed that it will lay off more of its workforce over the next twelve months, as it continues to restructure its business, following its disastrous acquisition of Nokia"s devices and services (NDS) unit in 2014.
Microsoft paid $7.2 billion for NDS, but ongoing low demand for Windows handsets prompted the company to review its phone hardware business soon afterwards. It booked $10 billion in "impairment, integration and restructuring charges" during its 2015 fiscal year, and a further $1.1 billion of "restructuring and related impairment expenses" in the year ending June 30, 2016.
That included a massive $7.6 billion write-down in July 2015, when the company cut 7,800 jobs in its phone division - and there have been many further lay-offs since then. In its 10-K submission to the SEC this week, Microsoft said that it "eliminated approximately 19,000 positions in fiscal year 2015" as part of its "Phone Hardware Integration Plan", which it completed on June 30, 2015.
And as part of its latest strategy, the "Phone Hardware Restructuring Plan", it says it "eliminated approximately 7,400 positions in fiscal year 2016". But further job cuts are coming, as Microsoft explained [emphasis ours]:
In the fourth quarter of 2016, management approved restructuring plans that would result in job eliminations, primarily across our smartphone hardware business and global sales. In addition to the elimination of 1,850 positions that were announced in May 2016, approximately 2,850 roles globally will be reduced during the year as an extension of the earlier plan, and these actions are expected to be completed by the end of fiscal year 2017.
As it stated, not all of these job cuts will be focused on its phone operations, with some lay-offs also affecting its worldwide sales team.
Microsoft massively scaled back its phone hardware portfolio last year, which its CEO, Satya Nadella, described as "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".
The company sold just 1.2 million Lumia handsets last quarter, and it recently claimed that the "focusing of [its] phone hardware business" means that it will miss its target of one billion Windows 10 devices by 2018.
Source: Microsoft (SEC) via Business Insider