More job cuts being announced at Microsoft

[Rogifan]

So says the New York Times.

http://www.nytimes.com/2015/07/09/technology/major-job-cuts-expected-at-microsoft.html?_r=1

The layoffs are in addition to the about 18,000 employees that Microsoft said it planned to let go a year ago, according to people briefed on the plans, who asked for anonymity because the details were confidential. The new job cuts are expected to affect people in Microsoft’s hardware group, among other parts of the company, including the struggling smartphone business that it acquired from Nokia last year in a $7.2 billion deal.

I think the handwriting was on the wall when Stephen Elop was let go and the hardware stuff was folded under the Windows team. There have been rumors that Microsoft would be writing down the Nokia acquisition. I wouldn't be surprised if we hear about that today.

 

[Ted13]

I think the handwriting was on the wall when Stephen Elop was let go and the hardware stuff was folded under the Windows team. There have been rumors that Microsoft would be writing down the Nokia acquisition. I wouldn't be surprised if we hear about that today.

Yup, they wrote down MORE than their entire Nokia purchase cost. Next: they will go out the phone hardware business.

 

[lowendlinux]

Nadella is just making MS whole again, he got many years of things to correct.

 

[Rogifan]

Yup, they wrote down MORE than their entire Nokia purchase cost. Next: they will go out the phone hardware business.

Well his all employee memo says he remains committed to first party hardware. But that might just be lip service . I can see Microsoft keeping Surface but I think remaining in the phone business is futile. I think there's very little chance of them successfully competing in the premium segment of the smartphone market and the low end is dominated by Android. Microsoft should just focus on great apps for iOS and Android.

 

[lowendlinux]

Removing choice is bad and dropping the phone business also dents their one OS on all devices. MS is all about convergence and the phone is integral to that.

 

[maflynn]

He's fixing a major wrong that was committed by his predecessor - the purchase of Nokia. They'll still be making phones but as you can see by his prior actions Nadella is positioning MS as a software/service company across all platforms. That's why we're seeing more iOS and even android apps coming from MS under Nadella.

 

[Rogifan]

Removing choice is bad and dropping the phone business also dents their one OS on all devices. MS is all about convergence and the phone is integral to that.

Sorry I don't see any situation where Microsoft becomes relevant in the mobile phone business. They had some success in Europe mostly because of Nokia brand and selling cheap phones. I don't see how they compete with Android at the low end and there no evidence that anyone outside of diehard Windows phone loyalists are interested in a premium Lumia or Surface handset. That's not a large enough market for Microsoft to make the investment. I suspect Microsoft will be out of the phone business within 2-4 years. Anything they're doing now is either because they had stuff already in the pipeline with contractual obligations they need to meet or it's a face saving measure. Seems to me Nadella's focus is software/services/cloud, not first party hardware.

 

[maflynn]

MS is all about convergence and the phone is integral to that.

MS is now about convergence and the phone or rather the mobile market is integral to that. Their convergence is not tied to the success of the windows phone but rather the success of their products on iOS and android. Have you noticed more and more unique features of the windows phones are now on the other platforms?

There's less and less reasons today to buy a windows phone, not because they're not selling well, because many of the features that made it a good platform have been brought over to iOS and android.

 

[lowendlinux]

I disagree with both you and Rogi but only time will tell whose right.

 

[maflynn]

I disagree with both you and Rogi but only time will tell whose right.

Consider this. MS wrote off nearly the entire cost of the Nokia purchase and virtually gutted the phone division with the layoffs. That's not a move my a company that believes in their mobile platform. Also consider the implications for developers, MS has been struggling with trying to convince developers to write apps for the windows phone. In fact developers have been abandoning it more then embracing it. True with windows 10, android apps will run on it but why would I want a windows phone to run android apps when I can get an android phone in the first place.

The writing is on the wall, MS is moving away from handset business, consumers know, developers know it and now investors know it, given the write offs and layoffs.

 

[rdowns]

Microsoft should have bought Blackberry, not Nokia.

 

[lowendlinux]

Consider this. MS wrote off nearly the entire cost of the Nokia purchase and virtually gutted the phone division with the layoffs. That's not a move my a company that believes in their mobile platform. Also consider the implications for developers, MS has been struggling with trying to convince developers to write apps for the windows phone. In fact developers have been abandoning it more then embracing it. True with windows 10, android apps will run on it but why would I want a windows phone to run android apps when I can get an android phone in the first place.

The writing is on the wall, MS is moving away from handset business, consumers know, developers know it and now investors know it, given the write offs and layoffs.

MS wrote off Xbox loses for years also and is still making those. If MS doesn't have a presence in mobile they don't have a presence in the future.

 

[maflynn]

MS wrote off Xbox loses for years also and is still making those. If MS doesn't have a presence in mobile they don't have a presence in the future.

They will have a presence ion the mobile market - software/services. Clearly they failed miserably with the handset market. I do not know about the xbox right off - I'm not a gamer but I think that's a different animal because they compete mainly against Sony.

 

[subsonix]

Removing choice is bad and dropping the phone business also dents their one OS on all devices. MS is all about convergence and the phone is integral to that.

Traditionally MS has offered an OS built to a platform spec, and left the hardware to OEMs that could build to that spec. It was what made them successful to begin with, leaving their ties with IBM once the platform was "free" to use and clone. Building the hardware as well is pretty recent, (if you discount the XBox) and is more in line with what Apple has always done. Making their own hardware, actually makes them competitors to their OEM partners, which can't be good, especially for phones where there are viable alternative OSes around.