Tech

Microsoft To Drop Its Phone Business, Cuts More Jobs

By Victor Thomson , Jul 29, 2016 05:49 AM EDT
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In a move aimed at continuing its closure of phone hardware business, Microsoft has announced on Thursday, July 28, 2,850 more job cuts expected by the middle of 2017.

PCWorld reports that Microsoft revealed that, on top of the 1,850 cuts announced earlier this year, the company will cut an additional 2,850 jobs. Microsoft employees impacted by the layoffs will primarily be those working in the company's phone hardware business.

Microsoft phone business has already been hit hard by plunging global sales and as a consequence, the company announced layoffs earlier this year. The job cuts are a coming after the high-tech company has decided to downsize its smartphone business acquired from Nokia.

Microsoft has officially disclosed the job cuts in the 10-K filing. The company's most recent quarterly financial report unveiled a year-over-year decline in revenue. It is still unclear what the layoffs will mean for the Microsoft's business overall.

In particular, Microsoft's smartphone hardware business has been an underperforming spot on company's financials. For the past several quarters, the phone business niche in has been seeing massive revenue declines.

Nokia's acquisition by Microsoft has been one of the last business decisions of former Microsoft CEO, Steve Ballmer before he announced his departure from the company's top job. His successor, Microsoft CEO Satya Nadella has not taken the same interest in the phone hardware business.

According to Recode, at this point, the high-tech giant has essentially closed nearly all of the Nokia mobile phone business acquired $7.2 billion back in April 2014. The strategy of Nadella has been to develop more of Microsoft's software apps on Android and iOS instead of trying to push marketing of the Windows phones.

Nadella also led the acquisitions of several iOS apps, among them being included calendar app Sunrise and email program Acompli. Now both of these software apps are part of the mobile version of Outlook.

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