Microsoft is expected to announce plans for major job cuts as early as today. The cuts will reportedly involve the company’s hardware division, including the Lumia employees.
The news comes thanks to the New York Times, which is quoting unnamed sources inside the company, who have disclosed these plans. The same sources mention that this cut is on top of the nearly 18,000 people that Microsoft let go of, in the past year.
The move likely signifies Microsoft’s struggle to reposition itself under CEO Satya Nadella’s guidance, and represents another of the “tough choices” that Nadella recently mentioned in an internal memo.
The hardware division, especially the phone part, has been underperforming inside of Microsoft ever since the company bought this entire arm from Nokia in a $7.2 billion deal. The company had previously warned that it had overvalued this purchase and that a large write-off might soon be needed.
Despite the company’s efforts and significant investments over the past years, Microsoft’s Windows Phone has failed to garner enough momentum in the worldwide market, where it only accounts for less than 5% of users. Because of this, further cutbacks inside the phone division were indeed expected as a cost-cutting measure.
That’s not to say Microsoft is expected to abandon its mobile strategy anytime soon. With Windows 10 Mobile expected to launch this fall, alongside new flagship devices and a number of accessories, Microsoft will likely continue to push its products for the foreseeable future. And having a leaner hardware division, while working more with partners, may help the company achieve its goals.
Source: New York Times
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