Microsoft Admits Nokia Deal Failure – 7800 to Lose Jobs

/ 2 years ago

microsoft nokia deal

It was coming. Microsoft has announced that up to 7,800 employees of its phone division could be made redundant, implicitly admitting to the failure of its $7.9 billion purchase of Nokia in 2013. The move follows the company’s decision to write down $7.6 billion-worth of losses due to the floundering of its smartphone division.

Microsoft’s purchase of Nokia’s smartphone operations – the premier developer of Windows Phones – two years ago was met with a degree of confusion from commentators and even some resistance from within the company itself, with current CEO Satya Nadella famously opposed to the deal.

“I am committed to our first-party devices including phones,” Nadella wrote in an e-mail to employees that was later posted online. “However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.”

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“They were hoping to quickly be able to hit the jets and double or triple market share over what they had,” Frank Gillett, analyst for Forrester Research, says of Microsoft’s purchase of Nokia’s phone division. “And it didn’t happen. It’s the last disappointment of the previous generation of Microsoft’s leadership,” he says, referring to former Microsoft CEO Steve Ballmer, the instigator behind the deal.

Thank you Mashable for providing us with this information.

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One Response to “Microsoft Admits Nokia Deal Failure – 7800 to Lose Jobs”
  1. Tim Sutton says:

    “They were hoping to quickly be able to hit the jets and double or triple market share over what they had,”

    They might have done exactly that, if they’d only released a high end device for a market shifting price, similar to Googles Nexus program.

    I love my Lumia 1520, it’s still close to the top of the pile of all phones.. and I adore Windows Phone, but it’s a year old and soon I’ll want a premium Windows handset to upgrade to. And there isn’t one.

    The whole idea behind Windows 10 was that it would run on PCs, tablets and phones, so everything worked on everything else as you moved around. I still think that is EXACTLY what we should be moving towards, and that it would be a massive game changer in terms of Windows on phones suddenly becoming almost essential to have.

    I think it would be extraordinary if MS are baling on phones literally days before Windows 10 is released. It would torpedo the strategy that most commentators have agreed is the best out there, despite the frankly odd assertion in this article that the Nokia purchase was broadly seen as a mistake.

    I hope that Nadella is being misinterpreted. I hope MS have lined up people to produce flagship WP devices, whether that’s internal or Nexus style farming out to other companies.

    Mostly, I hope that the integration of our many personal devices into one seamless network running the same system continues.. because it’s the ONLY way that makes sense.

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