It’s been a few weeks since Microsoft Corporation (NASDAQ:MSFT) revealed a major corporate executive restructuring. The company has announced new restructuring efforts that will lead to 7,800 job losses.
The new restructuring efforts will involve the company’s mobile phone business that it acquired from Nokia Corporation (ADR) (NYSE:NOK) in 2014. It also comes a few weeks after the company employed rapid measures to rebrand all of Nokia’s stores with the Microsoft brand name. The acquisition also resulted into the first Microsoft branded smartphones in the market. The mobile phone division was part of the company’s strategy to make a solid stand in the mobile phone industry as well as a competitive move against rival firms.
It was also aimed at promoting synergy by merging the software and hardware aspects of the company to provide unilateral products. However, Microsoft has decided to take another direction. The company announced that it plans to write off the $7.6 billion that was spent to acquire the phone division from Nokia. Additionally, Microsoft announced that it will face a restructuring cost that will range between$750 million to $850 million.
Microsoft Corporation (NASDAQ:MSFT)’s Chief Executive, Satya Nadella briefed the company’s employees through an email stating the changes. He explained the decision as a means to move from a standalone mobile phone venture to a lively Windows ecosystem including the company’s first party device unit. He also added that the company plans to operate a more effective phone portfolio in the short run, so as to align the long-term mobility.
Mr. Nadella is fully focused on pointing the company back on the right track especially with the new Windows 10 system that is will be launched towards the end of July. The company has always had its software division as they key points of focus. This does not mean that the company will not continue to deal with mobile devices. In fact, it could be a hint that the company is shrinking its phone portfolio and will work towards high-end flagship mobile devices.
