Microsoft to Cut 7,800 Jobs Amid Phone Woes--2nd Update

By Chelsey Dulaney 

Microsoft Corp. unveiled plans Wednesday to cut up to 7,800 jobs and take a $7.6 billion write-down related to its 2013 purchase of Nokia Corp.'s handset business.

In addition to the write-down, which will be booked in its fiscal fourth quarter, Microsoft said it also would take a restructuring charge of $750 million to $850 million. The company expects the moves to be "substantially complete" by the end of the calendar year.

"We are moving from a strategy to grow a stand-alone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family," Chief Executive Satya Nadella said in an email to employees. Most of the job cuts will come from the phone business.

The $9 billion Nokia deal--struck by Mr. Nadella's predecessor Steve Ballmer in late 2013--was supposed to make Microsoft a relevant player in smartphones. Instead, the company's Windows smartphones lost market share and bled red ink.

In June, Microsoft reshuffled its executive ranks, the latest sign that it is hitting the reset button on its smartphone hardware business. The moves included the departure of former Nokia chief Stephen Elop.

Microsoft said future prospects for the phone hardware segment are now below its original expectations.

Shares of Microsoft, down 4.6% this year, rose 0.6% to $44.57 in premarket trading.

Microsoft had warned recently that it planned to cut costs at its smartphone business and other hardware units. Its struggling Nokia unit was targeted for thousands of job cuts in the biggest layoffs in Microsoft's history, announced last year.

As of March 31, Microsoft said it had cut 18,000 jobs, according to a regulatory filing.

Write to Chelsey Dulaney at [e-mail]

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