Microsoft’s mobile business is set to go through a major transition as the company on Wednesday announced plans to cut 7,800 jobs alongside confirming it will reorganise the Windows Phone unit. In its latest attempt to restructure the phone business, Microsoft is said to decide on launching one or maximum two models each year in three different categories catering to affordable segment, business customers, and premium end or the flagship segment.
Bloomberg citing a person familiar with the company’s plans reports that Microsoft’s restructuring includes reducing the number of handsets it releases. The person, who asked not to be named as the plans had not yet been made official, added that Microsoft is looking to launch “one or two models a year in each of three categories.” The source said the release cycle would be close to one launch a week “when counting variations for geographical markets.”
The report also claimed that Microsoft has plans to exit locations and carrier relationships where it has not tasted success in the market.
Soon after the news broke out, Satya Nadella in an email on Wednesday to employees detailed plans on sharpening the firm’s business focus. Nadella discussed several points alongside shared plans about the phone business, detailing the firm’s focus on three particular segments.
“We plan to narrow our focus to three customer segments where we can make unique contributions and where we can differentiate through the combination of our hardware and software. We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices they’ll love,”
he said, describing the categories which could also be detailed as business phones, budget phones, and high-end phones.
“While the US has been a difficult market for Nokia, Microsoft is unlikely to stop making phones for the country because of its size,”
report quotes the person. Microsoft’s spokesman, Pete Wootton, declined to comment on the restructuring plans.
Looking at Microsoft’s phone launches this year, the Redmond giant has largely focused on budget to mid-range segment announcing the
Lumia 430 Dual SIM,
Lumia 640 XL.
Nadella in his email also added that the company has written down the value of the phone business acquired from Nokia,
“We announced a fundamental restructuring of our phone business. As a result, the company will take an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services business in addition to a restructuring charge of approximately $750 million to $850 million.”
To recall, Microsoft’s Windows 10 operating system would be hitting the market on July 29.