Microsoft said Wednesday that it would lay off up to 7,800 workers, mainly in its mobile phone unit, in a restructuring effort aimed at refocusing the software giant on its core businesses.
As a result of the cuts, Microsofft said it would record a $7.6 billion impairment charge related to assets associated with the acquisition of the Nokia Devices and Services (NDS) business in addition to a restructuring charge of between $750 million and $800 million.
This would be the second major restructuring since new CEO Satya Nadella came on board last year. In July 2014, Microsoft said it would jettison about 18,000 workers, again mostly in the phone unit, in an effort to become “more agile.”
Nadella outlined the changes in an email to employees Wednesday.
In a statement, Microsoft said the most recent changes follow moves to realign company priorities, including recent changes to its engineering teams and leadership, plans to transfer the company’s imagery acquisition operations to Uber, and shifts in its display advertising business that allow it to invest further in search.
“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 a statement. “In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”
The software behemoth purchased Nokia in 2013 and was one of then-CEO’s Steve Ballmer’s most highly criticized deals. Analysts at the time believed the $7.2 billion purchase ($9.4 billion including acquired cash) saddled the company with an outdated legacy business.