The last chapter of the failed Nokia acquisition has arrived.
Microsoft on Wednesday announced plans to "streamline" its smartphone hardware business, which will impact up to 1,850 jobs. Microsoft will record an impairment and restructuring charge of approximately $950 million, of which approximately $200 million will relate to severance payments.
“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,” said Satya Nadella, chief executive officer of Microsoft. “We will continue to innovate across devices and on our cloud services across all mobile platforms.”
Microsoft is now doing what they should have done from the beginning - invent a smartphone on their own and not spend billions on a Nokia, who was a "has been." Microsoft knows how to do hardware. The Xbox and the Surface tablets are great examples. Some reports say that Microsoft drops out of the consumer smartphone business, but this is not what Nadella says in the statement.
Microsoft will make phones that are different and add value to Microsoft centric businesses and consumers. A Surface Phone has been already been rumored to be in the works.
Microsoft anticipates this will result in the reduction of up to 1,350 jobs at Microsoft Mobile Oy in Finland, as well as up to 500 additional jobs globally. Employees working for Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, are not in scope for the planned reductions.
More information about these charges will be provided in Microsoft’s fourth-quarter earnings announcement on July 19, 2016, and in the company’s 2016 Annual Report on Form 10-K.
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Earlier this month Microsoft announced the sale of the feature phone business unit.