Windows Phone has not been the greatest success story in the world, and Microsoft’s purchase of Nokia to produce its own handsets looks to have been an even bigger flop. The company today announced that it is writing off $7.6B against the Nokia business – more than it paid for the company in the first place.
Microsoft has also revealed that it will be laying-off 7,800 staff – more than 6% of its workforce – over the next few months, mostly from the Phones business …
CEO Satya Nadella said in an email to staff that the company would be moving away from attempts to grow its phone hardware business.
“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,” Nadella said. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”
He insists, however, that this does not mean the company is entirely giving up on producing its own handsets, reports the NY Times.
“I am committed to our first-party devices including phones,” Mr. Nadella said. “However, we need to focus our phone efforts in the near term while driving reinvention.”
Nadella had previously warned staff of the need to make “tough choices” and “solve hard problems.” The employment of former Nokia CEO Stephen Elop was apparently one of those choices – he left the company last month.
ComScore data last month showed that Microsoft’s Windows Phone platform held just a 3.6% market share, behind Android’s 53.2% and Apple’s 41.3%.