Microsoft undergoing massive job cuts

According to a memo issued by Satya Nadella to the employees last week, Microsoft will be cutting 7,800 jobs. Most of these employees are from Nokia, a struggling Finish phone manufacturer that Microsoft acquired last year. Announced on Wednesday, this lay off will comprise of roughly 7% of its workforce and write down nearly $7.6 billion related to its Nokia phone business as impairment charge. Last July Microsoft stated that it would cut at least 18,000 jobs globally. This lay-off is Microsoft's way staying focused more on software and cloud solutions and hence most of the job cuts will be in the phone hardware business. To be exact, one third of the job cuts will be in Finland; in the product development unit. It must be mentioned that this is the second time Microsoft is laying off after Satya picked up the mantle of this corporation. Satya Nadella has been able to achieve new feats in the company's cloud and enterprise software capabilities although investors have shown concern that even with the transition to cloud, Microsoft was not being able to boost sales of Windows, Office or its smartphones.

This move from Microsoft didn't exactly come as a surprise as it was expected to write off all or part of the $7.2 billion it sunk in to acquire Nokia's handset unit in 2014. That acquisition did not exactly bring any success for the company and Microsoft could only grab 3% of the smartphone market. It has been announced last month that the former leader at Nokia, Stephen Elop, would part ways with the company. Analysts have observed that Microsoft needs to reduce more costs if it wants to be a key player in the smartphone market. As of 31st March, there were more than 118,000 people employed in Microsoft globally and it was said on Wednesday that the company will take a restructuring charge of about $750-$850 million in its fourth quarter.