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Microsoft Cuts 2,850 Jobs

On Thursday, Microsoft submitted a filing to the SEC containing the news that the company will cut approximately 2,850 jobs related to its smartphone business over the course of the year. This is in addition to the 1,850 jobs Microsoft shed in May 2016, also in its smartphone division.
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CNN Money notes that Microsoft laid off 7,800 workers last year, and “went through its biggest round of layoffs in the company’s history when it cut 18,000 positions in 2014, due mostly to its Nokia (NOKBF) deal.” Microsoft purchased the handset and services division of Finland-based phone manufacturer Nokia in 2014 for $7.6 billion. The deal originated under former CEO Steve Ballmer in 2013.

“The Nokia deal was seen as Steve Ballmer’s baby,” wrote Barb Darrow at Fortune, after last year’s layoff. “The former Microsoft CEO was hell-bent on fixing Microsoft’s mobile business where it was getting buried by Apple AAPL -0.12% and Android devices. It could even be argued that buying its way into mobile was faster and maybe cheaper than building that business organically.”

Tough Choices for Microsoft

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Last year, in an internal memo obtained by Geekwire, Microsoft CEO Satya Nadella laid out an agenda for the fiscal year. The memo concluded, in part:

“I believe that culture is not static. It evolves every day based on the behaviors of everyone in the organization. We are in an incredible position to seize new growth this year. We will need to innovate in new areas, execute against our plans, make some tough choices in areas where things are not working and solve hard problems in ways that drive customer value.”

A Microsoft spokesperson told The Seattle Times that 900 layoffs have already taken place in the unit supporting smartphone sales. The company declined to comment on where the reduced positions were located, geographically, although the SEC filing notes that reductions would take place “globally.”

As of June 30, 2016, Microsoft employed 114,000 full-time employees worldwide, with 63,000 positions located in the U.S.

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Jen Hubley Luckwaldt
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