The smartphone division of the company is experiencing a staggering number of job losses.
Microsoft has made an unhappy mobile technology news announcement of 3,000 upcoming job losses. The majority of the lay-offs are the result of the astounding failure of the Nokia deal and the redundancies it created.
The affected employees will be losing their positions over the next year within that division.
The Microsoft smartphone hardware business and global sales division will experience a massive reduction in size. Moreover, this is only the latest bad mobile technology news the company has issued this year. Back in May, it confirmed that its mobile branch would be downsizing by 1,850 jobs. At that time, Terry Myerson, the vice president of Windows and device said “we’re scaling back, but we’re not out!”
This all stems from the mobile technology news when Microsoft bought the devices and services business at Nokia.
The acquisition occurred in 2013. Microsoft made the purchase for $7.1 billion (€5.4 billion). Not only did it buy the devices and business, but it also took in all the associated problems. As it unfolded, it became one of the most disastrous tech acquisitions in history.
Three months after the acquisition closed, Microsoft eliminated 18,000 positions. The majority were from the phone hardware division. This mainly removed employees who had become a part of Microsoft by way of the Nokia buy-out. One year after that point, Microsoft wrote off $7 billion and laid off 7,800 more employees.
This downward spiral continued into May when the vast majority of the feature phone business was sold at a tiny fraction of its purchase price and additional 1,850 jobs were lost.
Now, the mobile technology news trend continues at Microsoft. In the elimination of redundancies, the company is slashing 2,850 jobs. Within a U.S. regulatory filing, the software giant explained: “we periodically evaluate how to best deploy the company’s resources.” Microsoft also said the restructuring would primarily affect the smartphone hardware business and global sales. These latest position eliminations will be in addition to those announced in May and will not include those figures in their total.
The size of the affordable device marketplace is estimated to be $50 billion and the company wants in.
American software giant, Microsoft, is looking to rejuvenate the former glory of Nokia by targeting the market for cheap smartphones, in order to be able to access the affordable handset marketplace which is estimated to be worth approximately $50 billion.
The company just recently announced that it would be removing Nokia’s name from the devices.
Before Nokia was acquired by Microsoft, it had watched its market share plummet as powerful competitors such as Apple and Samsung carved out their own considerable pieces of the pie. The primary struggle was in being able to keep up with the rapidly evolving expectations of consumers. Now, it looks as though the new owner of the handset business will be looking to define itself within the affordable cheap smartphone sector.
This could be because cheap smartphones are becoming increasingly desirable by consumers worldwide.
Microsoft first partnered with Nokia in 2011 for the launch of the handset maker’s Lumia line of devices, as those mobile phones were based on the Windows Phone operating system. That platform has become the fastest growing ecosystem within the marketplace for smartphones, according to the IDC research firm. By the last quarter of 2013, it had become the third largest mobile operating system.
According to a statement from Microsoft, “With the Nokia mobile phone business, Microsoft will target the affordable mobile devices market, a $50 billion annual opportunity, delivering the first mobile experience to the next billion people while introducing Microsoft services to new customers around the world.”
Low cost handsets and cheap smartphones have become a very important part of the mobile marketplace throughout many emerging markets, particularly in Asia and in Africa. Asian handset makers such as Huawei, Micromax, ZTE, and Karbonn have been credited with driving growth in those regions. Clearly, Microsoft has not failed to take notice of this opportunity in these regions where mobile devices are achieving exceptional penetration among the populations. It is keen to ensure that it does not miss out on what those regions have to offer in terms of device sales – particularly gadgets based on its operating system.
