By Chelsey Dulaney
Microsoft Corp. unveiled plans Wednesday to cut up to 7,800 jobs
and write down the value of its Nokia purchase by more than 80%,
the latest indications of the company's continuing struggles in the
phone business.
In addition to the write-down, which will be booked in its
recently ended fiscal fourth quarter, Microsoft said it also would
take a restructuring charge of $750 million to $850 million. The
company expects the moves to be "substantially complete" by the end
of the calendar year.
"We are moving from a strategy to grow a stand-alone phone
business to a strategy to grow and create a vibrant Windows
ecosystem including our first-party device family," Chief Executive
Satya Nadella said in an email to employees. Most of the job cuts
will come from the phone business.
The $9 billion Nokia deal--struck by Mr. Nadella's predecessor
Steve Ballmer in late 2013--was supposed to make Microsoft a
relevant player in smartphones. Instead, the company's Windows
smartphones lost market share and bled red ink.
In June, Microsoft reshuffled its executive ranks, the latest
sign that it is hitting the reset button on its smartphone hardware
business. The moves included the departure of former Nokia chief
Stephen Elop.
Microsoft said future prospects for the phone hardware segment
are now below its original expectations.
Shares of Microsoft, down 4.6% this year, slipped 6 cents to
$44.22 in morning trading.
Microsoft had warned recently that it planned to cut costs at
its smartphone business and other hardware units. Its struggling
Nokia unit was targeted for thousands of job cuts in the biggest
layoffs in Microsoft's history, announced last year.
As of March 31, Microsoft said it had cut 18,000 jobs, according
to a regulatory filing.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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