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Microsoft Will Cut 7,800 Jobs And Narrow Focus On Mobile

A Nokia Lumia 620 Windows Phone

It’s been just over a year since Microsoft bought Nokia’s phone business, and now the software company is admitting it hasn’t gone according to plan. Microsoft will cut 7,800 jobs – mostly in that phone division – and take an impairment charge of $7.6 billion, almost as much as it spent to buy Nokia. 

Microsoft wouldn’t disclose how many jobs in the Puget Sound region will be lost, but a spokesman says most of the layoffs will happen outside the U.S. Overall, the job cuts amount to more than 6 percent of Microsoft’s workforce.

IDC analyst Al Hilwa says it’s become clear that buying Nokia was probably a mistake and now Microsoft is trying to narrow its focus in the phone business to play to its strengths.

"This is a shift from initially trying to chase the iPhone at the high end and then later trying to chase Android at the low end," Hilwa said. "Neither has really worked for them."

Windows Phones have captured less than 3 percent of the smartphone market.

But Hilwa says Microsoft is not exiting the mobile phone business. Instead, he says the company is trying to be more strategic.

He says Microsoft will likely focus on showcasing what the operating system can do and at the same time, try to sign up other hardware makers to make Windows Phones. But he says they’ll have to convince those companies that there’s enough consumer demand.  

In July 2017, Ashley Gross became KNKX's youth and education reporter after years of covering the business and labor beat. She joined the station in May 2012 and previously worked five years at WBEZ in Chicago, where she reported on business and the economy. Her work telling the human side of the mortgage crisis garnered awards from the Illinois Associated Press and the Chicago Headline Club. She's also reported for the Alaska Public Radio Network in Anchorage and for Bloomberg News in San Francisco.
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