Remember when Microsoft bought Nokia? Yeah, it wasn’t all that long ago, and many of us felt that Nokia would be the only one making phones that ran Microsoft’s mobile OS, however, that appears to not be the case today. Microsoft CEO, Satya Nadella has announced that they will be laying off some 7,800 employees, mostly in their phone business. Which means Nokia employees. Additionally, Microsoft is doing a $7.6 Billion write off in relation to buying Nokia. Remember, Microsoft only paid $7.2 billion for Nokia.
In an email to his employees, Microsoft CEO, Satya Nadella stated:
“I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.”
So, it’s clear that Microsoft isn’t planning on getting rid of making their own smartphones running Windows, but they need to refocus their efforts on these first-party devices. But that makes you wonder, will they have any partners willing to work with the company for Windows 10 devices? There are not a whole lot of partners building Windows 10 smartphones at this moment anyways, with Samsung mostly focusing on Android and their Tizen OS, and HTC having trouble just making Android devices. What’s next for Microsoft?
In this email to Microsoft employees, Nadella also stated:
“In the near term, we will run a more effective phone portfolio, with better products and speed to market given the recently formed Windows and Devices Group. We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software.”
So we might see Microsoft do something like what Google did after they bought Motorola. Pair back their phone portfolio and only have a few devices available. It’s worked wonders for Motorola so far, so we can only imagine what it will do for Microsoft.
It’s said to see nearly 8,000 people lose their jobs. But sometimes you’ve got to cut the fat, and it’s better for Microsoft to do this now rather than down the road when they are in dire straights.