Microsoft will be cutting another 7,800 jobs globally, mostly from its phone division, according to a company-wide email by CEO Satya Nadella on Wednesday. This new round of layoffs come a week after the company sold off its advertising division, and a month after Microsoft completed a round of 18,000 layoffs.
“We expect that the reductions will take place over the next several months,” wrote Mr. Nadella of the most recent layoff announcement.
The company will also be taking a write-down of around $7.6 billion on its phones division associated with Microsoft’s acquisition of Nokia last year.
Microsoft will instead be focusing on a more effective devices portfolio, Nadella says. And while he doesn’t rule out phones in that equation, commentators have speculated that this announcement signals the end of the Windows Phone, which ZDNet notes has not seen much growth over the past few years.
And it doesn’t make sense for the company to continue sinking billions of dollars into a system only used by a couple million people, the article notes.
And though Nadella did not create Microsoft’s profit loss over the past few years, it’s something he’s been working to correct since taking over in 2014.
For those who have been following Nadella’s tenure as Microsoft CEO thus far, this mindset of cutting projects isn’t new. His goal outlined numerous times has been to differentiate Microsoft from its competitors and his email is in many ways an extension of that vision. Nadella wants the company to cut projects, programs, and divisions to focus on what he feels Microsoft does best: personal computing, cloud platforms, and business productivity.
“We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love,” Nadella wrotes.
Looking forward, those “flagship devices” might not include the Windows Phone. Instead, the company may focus on optimizing their successful Surface devices, or trying to enter the Virtual Reality sphere with HoloLens.
At this moment, the Windows Phone is still alive – Microsoft has all but killed it. Though Microsoft is putting more of its effort into Windows 10, Office 365, Bing, and Azure, CNBC notes that Windows 10 is optimized for mobile devices.
Whether that means the return or death of the Windows Phone, or some new venture for Microsoft is unknown. Regardless, Nadella notes that Microsoft’s devices are not limited to its phone.
“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,” Nadella says.