During the news last week that AOL would be taking over for Microsoft’s display ad business for the next ten years, it was made clear that Microsoft wanted to focus on their core set of services. According to Geekwire, CEO Satya Nadella sent a company-wide email rallying employees around the new mission statement: “To empower every person and every organization on the planet to achieve more.” It would seem that either phones aren’t a part of that vision anymore or Microsoft is simply aching after their acquisition of Nokia last year, which cost them $7.2 Billion.
In either case, it was announced this morning that Microsoft would be laying off up to 7,800 employees, which represent about 7% of their presence in the United States as a part of their restructuring of the smartphone hardware business at their company. This is after 18,000 layoffs were announced last year from Nokia’s devices and services business, which was about 14% at that time. According to CNN Money, Microsoft’s purchasing of Nokia is criticized as one of former Microsoft CEO Steve Ballmer’s worst deals while he was at the helm.
“It is a deal that makes no sense,” Ben Thompson, an independent analyst, wrote when the acquisition was first announced. “Adding on a mobile phone business that Microsoft probably should abandon is like attaching an anchor to said straitjacket and tossing the patient into the ocean.” One might start to draw parallels between Google’s acquisition of Motorola and Microsoft’s of Nokia. At this point, the question is how long it’s going to take for Microsoft to unload Nokia on some Chinese manufacturer like Lenovo.
However, this comes at a very interesting time, because of Microsoft’s strategy to leverage the adoption of their newest operating system, Windows 10, which will undoubtedly have a massive adoption due to the fact that it will be free to Windows 7 and Windows 8 users, to improve their mobile app ecosystem and hopefully lure more people to using their mobile platform. If it’s a successful plan (which only time will tell whether it will be) it would seem as though they would need to rehire some of these people, but really we won’t know until much later this year whether app developers will be willing to make things for windows 10.