Microsoft's Divorce From the Smartphone Business

By: Daniel Steingold | May 25, 2016

Recognizing that its entry into the smartphone business was disastrous, Microsoft is cutting 1,850 jobs in that department, most of them in Finland— Microsoft’s key acquisition in the cell industry had been Nokia, which is based in the Scandinavian nation.

Although Microsoft planned to write off nearly $1 billion from their phone business, their share price didn’t change much upon the announcement. Nokia was originally purchased for $7.2 billion by former CEO Steve Ballmer, in the hopes that its acquisition would make Microsoft a more device-oriented corporation.

Current CEO Satya Nadella was never in awe of the acquisition, as he constantly diminished the role the smartphone had within Microsoft. He would incorporate the devices group, once its own division, into being part of the grander Windows operating system sector.

Some speculate that this latest maneuver suggests that no more phones will be manufactured by Microsoft, although the corporation will continue to support Windows 10, along with future and past operating system iterations. Microsoft simply went on record to say that they will support their Lumia line of phones, but are unsure as to whether they’ll develop future phones.

According to research firm Gartner, the market share of Windows phones had fallen under one percent of total smartphones worldwide in the first quarter of 2016.

This new shedding of dead weight comes after last year’s $7.5 billion of writedowns and 7,800 job cuts in its phone sector, along with last month’s sale of its entry-level feature phones business for $350 million.

Of the 1,850 job cuts, 1,350 are expected to affect Finns, while the other 500 will impact those in other countries.

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