Two years ago, Microsoft Corp had bought handset maker Nokia in an attempt to go against market leaders like Apple Inc and Samsung Electronics Co Ltd. Now on Wednesday, just two years later, they announced big cuts in smart phone business. Naturally, this move will put a stamp on Satya Nadella who is the chief executive, on the U.S. company. Microsoft plans to shed up to 1,850 jobs, mostly in Finland, and there by write down $950 million from the business. They have not revealed how many employees are employed in their smart phone company. Steve Ballmer was the previous chief executive of the company, known primarily for its software. In February, when Nadella became the CEO the shares of Microsoft were around $34.20. Today, after nearly two years the shares of Microsoft were trading around $52 late on Wednesday, while on Tuesday it was $51.59.
In 2013 Ballmer’s last major act was a deal to buy Nokia, who was then struggling but earlier had a dominant handset business, for about $7.2 billion. This deal closed in April and just two months later Nadella became CEO. From that time onwards Nadella has worked day and night at the phone business. In 2015 he restructured the devices group, which was earlier a stand-alone unit under Stephen Elop, the former Nokia chief under the Windows group. The Windows division, which is run by Terry Myerson is the company’s biggest.
Reuters was told by a Finnish union representative that the cuts would essentially put an end to Microsoft’s development of new phones. A shop steward, Kalle Kiili said my understanding is that Windows 10 will go on as an operating system, but there will be no more phones made by Microsoft.In a statement Microsoft said that it would continue to develop the Windows 10 platform and support its Lumia smart phones, but they did not comment on whether they would develop new Windows phones or not.
