Microsoft Corporation (NASDAQ: MSFT) announced that the company will cut 7,800 jobs mostly in the cell phone hardware segment. This is a cut of more than 6% of the company’s entire workforce. Through the upcoming reconstruction of the company’s mobile business, Microsoft will write down $7.6 billion associated with its Nokia business, which was acquired by Microsoft back in 2013.
Microsoft CEO Satya Nadella said in a letter to his employees, "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… In the near-term, we'll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."
Company representative explained the Microsoft will not try to attract a wide range of Smartphone consumers anymore, and instead will focus on more narrow demographics, like business oriented users who need sophisticated management, security and productivity apps, as well as developing devices on cheaper end of scale for customers looking for a basic phone.
The planed releases of the new Lumia devices later this year will not be affected, but it seems these will be the last upgrades of the Lumia devices targeting the wide spectrum of customers.