Microsoft 2015 Layoffs: 7,800 Employees Lose Jobs After Nokia Deal

Microsoft announced that it will be laying off about 7,800 workers around the world in its restructuring project.

The company posted on its website, explaining its decision to cut thousands of jobs after the company acquired Nokia’s phone business in 2014. Microsoft will be writing off $7.6 billion after the purchase.

Most of the employees to be laid off most likely come from the mobile department, since it was the only one cited. In 2014, Microsoft also announced its plans to lay off 18,000 employees. It is unclear whether the company will also be removing workers from other departments or if the 18,000 already includes the recent number, IGN.com reported.

The email, written by CEO Satya Nadella, told 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,” Nadella said. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”

He continued, “I don't take changes in plans like these lightly, given that they affect the lives of people who have made an impact at Microsoft. We are deeply committed to helping our team members through these transitions."

Microsoft stated that the company will record a charge in the fourth quarter of fiscal year 2015 for the impaired assets and goodwill in its Phone Hardware department, related to the NDS business. The charge will reportedly have no effect on cash flow coming from operations. The approximate amount of $7.6 billion is required, although Microsoft originally bought Nokia for $7.1 billion.

CNN Money revealed that the recent job cuts may have a huge negative effect on Finland, since many of Nokia’s employees work there. PekkaPekkala, communications head for Finland’s prime minister, stated on Twitter that 66 percent of Microsoft employees based in Finland will be laid off.

“Finland loses 2,300 jobs…pretty much killing the city of Salo,” he tweeted.

The Guardian reported that since Microsoft bought the Lumia division, the company released various consumer products that were not very well-received by users. Ben Wood, head of research for CCS Insight, shared that it was not surprising for Microsoft to cut their expenses by laying off employees. The company’s smartphone market share has been in the low single digits because the industry is currently dominated by Apple and Android phones. Even in the low-end market, Windows Phone sales did not do very well.