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Microsoft To Cut 7,800 More Jobs, Take $7.6 Billion Writedown On Nokia
jones_supa writes: Microsoft is about to announce another round of layoffs. A company press release confirms the plan, saying that it will target up to 7,800 employees and will be aimed mostly at the hardware division. The hardware division includes the lion's share of former Nokia employees, which became part of Microsoft last year. In an e-mail to employees, chief executive officer Satya Nadella reiterated the company's commitment to its phone business, though he also said that some refocusing was necessary and that Microsoft's phone business would reflect the overall Windows strategy: "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," the e-mail reads. "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."
Didn't MS buy Nokia for $7B, and they write off $7.6B, so they are pretty much writing off the whole Nokia as worthless.
So, basically Microsoft successfully killed the actual Nokia, successfully transferred the IP to themselves, have completely screwed the pooch in terms of being able to manage an acquisition which never made any sense ... and now they've written off the purchase.
I'm sorry, but if you're taking over $7 billion in writedowns, maybe the decision to but it in the first place was stupid and misguided?
This just sounds like Microsoft pissed away billions trying to prop up their failing phone, and are now leaving the rotting carcass of Nokia in their wake.
Is this anything but mismanagement and hubris? Because it sounds like other than fucking up Nokia it hasn't achieved a damned thing.
Lost at C:>. Found at C.
Haha!
Seems like nobody wants to make phones any more.
Watch this Heartland Institute video
Sometimes I feel like Ahab when it comes to Microsoft. and yet the truth is, Google is the new Microsoft. they are the Microsoft of the Internet so to speak. indeed there are many companies that resemble Microsoft, for instance Starbucks is the Microsoft of coffee and equally evil.
Embrace Extend ^H^H^H^H^H^H Extinguish
Apparently Elop is also out as part of the layoffs. Most likely he'll get a big payout for his part.
Well, there's spam egg sausage and spam, that's not got much spam in it.
This is sure to resolve the skilled tech labor shortage that the tech giants have been complaining about.
"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"
In other words: "We want to be Apple so bad it hurts, because as much as geeks hate Apple, they're still relevant among non-geeks and raking in the cash"
And the captcha manages to be wonderfully relevant again: "Reformat".
Going from ballmers dominator approach in which all markets become a subservient cash-cow for Microsoft product-driven walled gardens of commerce and perpetual licensing, to "we just want to make it a windows thing" is still completely missing the point. the 7 billion dollar writeoff is the business equivalent of a hangover from 30 years of chasing a white rabbit everyone else had already caught. focusing on windows isnt a business strategy, its a suicide letter.
For what windows does in the real world, other companies already do better and most importantly cheaper. games? steam is a household name. word processing? a google docs enabled chromebook has that covered in spades along with social networking and internet. While microsoft was busy jumping through hoops with zune, windows phone, and surface tablet, they completely ignored the fact that despite competitors dominating a product segment in terms of sales, their competitors had obsoleted the very birthright applications of redmond itself: the apps.
Microsoft has XBox (for now) and a contractual model of business licensing that will assume more and more the role of a monarchy over a colony as time marches on until finally the very same companies that targeted redmonds consumer products will begin to target their business divisions as well. A few more years here and there of fervent litigious hand waving will commence, more layoffs will ensue, and eventually Microsoft will have found itself not consumed 'cancerously' by the open source it vilified, but entirely sidestepped.
Good people go to bed earlier.
In other news, Microsoft is hiring 7800 H1B workers to head up their new mobile division.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
switching to Linux, along with all their friends and family. Keep up the good work.
"Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and productivity company for the mobile-first, cloud-first world and its mission is to empower every person and every organization on the planet to achieve more."
No, you produce crappy bug filled software which means that every working day businesses curse your name and wish that they had something that just WORKS!
"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,"
This isn't Apple envy. They didn't say they want to focus on one offering. They said they want a vibrant ecosystem that includes their first-party devices. They've learned that when you're making the bulk of your OS's phones yourselves, there's little incentive for competitors to license your software. However, if you make a reference model, or maybe a couple for different market segments, and license cheaply and liberally, then you can really grow the influence of your OS.
Microsoft successfully killed any relevance Symbian still had. They killed Meego. Firefox and Ubuntu are still on the horizon. They didn't kill Android of course, and won't at this point. iOS is another juggernaut. MS wants to play the game Google has been playing, because they won't beat Apple at theirs.
Now that's a haircut!
After 15 years of accumulated garbage, the company did need some deep cleaning.
Slashdot, fix the reply notifications... You won't get away with it...
I'll be curious to see if they don't go a step further and tell all the third party phone makers that they're no longer going to be able to have windows phones.
FTA
"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,"
So they're saying the exact opposite of that; rather than a Windows Phone market dominated by Microsoft's own handsets, they want that "vibrant ecosystem" of devices from other manufaturers. So it would make no sense do do the exact opposite of that and cut off third-party licensees from Windows Phone. Shrinking their own phone division and cutting off third-party manufacturers - why stay in the business at all?
Well, since Samsung and Apple are pretty much the only ones making any profits out of phones right now
Apparently not so much for Samsung lately.
Now let's hope the rumors that Nokia will begin producing Android smartphones in 2016 are true.
www.gaiageek.com
Maybe this was the plan all along. Get a huge tax break, and get essentially free patents to troll with.
This isn't Apple envy. They didn't say they want to focus on one offering. They said they want a vibrant ecosystem that includes their first-party devices.
Distinction without a difference really.
They've learned that when you're making the bulk of your OS's phones yourselves, there's little incentive for competitors to license your software.
Microsoft's problem is that their business model has been to SELL software. That worked fine in the PC market place because the hardware and the software were abstracted from each other AND they managed to become a de-facto standard before something like linux came along. Microsoft's problem in mobile is that they tried to replicate that business model (selling software to third party hardware makers) while Google was almost literally giving away Android to all of Microsoft's potential customers. Google makes their money from ads, not software sales so Google effectively evaporated any profit margin for Microsoft or anyone else who wasn't vertically integrated in mobile. The moment Nokia dumped their own platform for Windows they were effectively dead because nobody else wanted to use Microsoft's software and Nokia wasn't going to be able to drive it into the mobile marketplace by themselves.
So instead what Microsoft is belatedly realizing is that they should have followed Apple's model and vertically integrated for mobile. Apple is a software company fundamentally. What makes a mac different from a PC is OS X. What makes an iPhone different from an Android phone is iOS. The hardware is basically the same underneath. So Apple sells you their software but won't sell it without a fairly nice device to go along with it. However an important feature in this is that Apple has design chops and retail experience in their DNA. Microsoft doesn't. So Microsoft has to replicate what Apple is doing without the design culture that makes Apple successful at doing it.
Basically it's fortunate for Microsoft that they have a huge amount of cash in the bank because I think they are going to burn through a lot of it trying to transform the company into something they currently are not. They have enough cash that I'm not about to declare them dead but Microsoft doesn't have an easy road ahead of them I think.
n/t
Such sweet words to coat a turd for people to swallow.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
The thing is, Windows Phone is a better OS than either iOS or Android, so it makes sense that they'd think that companies would want to pay to license their software.
"Better" in what way that matters? It has a different interface but the Windows version for mobile is functionally basically identical to iOS or Android. It's fine but there is nothing customers care about that Windows has that iOS or Android lack.
Anyway Microsoft's PC business model won't work in mobile. It makes no sense for companies to license Microsoft's software when Google is giving Android away for free. Microsoft should have pursued Apple's business model and vertically integrated for mobile. Now I think it is too little too late. Microsoft used to be able to buy their way into a market but Apple and Google both have enough cash that that tactic isn't likely to work.
NVIDIA has about 9000 employees and make some of the best damn graphics cards on the planet.
7,800 employees is a medium size company and Microsoft is letting them go. I think they should let a few executives go too and start a company with those employees.
Microsoft has acquired Nokia for their IP and snuffed them out. Exactly as planned.
If I were Finnish I'd start asking questions to the regulators that lest this happen. Why was a symbol of national pride allowed to be chopped up and sold to an American company, shafting countless thousands of high paid, high tech workers?
I'd ask them questions, and if found complacent, make sure they never hold public office again.
We need 5000 H1B's there needs to be a law saying that you can't hire h1b or hire them thought any subcontractors / contractor / staffing firm. With out first offering the same jobs to any one layed off and the H1B min pay rate must be at least the pay of layed off workers. also have an H1b OT pay start at X2 for any thing over 40 hours a week or min pay $150K + COL.
So the 7600 coders we need are not the ones we have. These people worked for a company building electronics mated to software, and are clearly not part of the "Windblows Fone 7"(tm) game plan. Clearly they care less about their traditional customer base now than ever before. The expansion and growth part of the company is long over. They have tried to be a gaming company (but not on computers, only on x-box), they have tried to be a phone and tablets company (and that's gone over like a lead balloon). And so now they are "focusing on their core competencies"(tm) which means "if it makes money, keep it, if it doesn't, sell it or chop it". They don't advertise anymore, they don't mass-market anymore. They are very much an HP type of company: niche and dying. Green field applications in the workplace are wildly cheaper alternatives to their stuff. As the next generation of computers goes into businesses, open platforms will dominate. Their 'not invented here' mentality is costing them. The people wanting every last bell and whistle their stuff offers and demanding it, are finding themselves shown the office door. The grey hair that demanded it is now a liability. The more agile multi-platform systems are a safer long-term bet. As the old grey CXO's go, so does their fortunes. George Eastman made a lot of money at one time, but now his technology company is now a footnote in history.
And Microsoft will have replaced some of these soon-to-be-laid-off workers with people from India. I'm done with Microsoft. They cannot do mobile, they cannot do servers that can stand up to tons of load. They are unfocused, flailing. The train has left the station. I've fully gone to Linux on the server side and Apple on the desktop/mobile side. Everyone is happier. Microsoft is going to to become less and less relevant what with mobile growing year after year. Just this month's metrics for mobile show over 35% of all emails are opened on mobile devices. More and more businesses are operating whilst mobile. Shopping has upticked to almost as much as email this year on the mobile platforms of Android and iPhone. MS is moving everything to SaaS because they have to in order to survive. Same old game -- get people locked in -- make it difficult to leave.
I read this whole thing as an end to the whole Windows 8 chapter. This whole thing started when Ballmer freaked out about the iPhone/iPad, and Microsoft immediately set out to turn Windows into iOS, make a tablet, and make a phone, just like Apple. Windows 8 and even Windows 10 to some extent is so heavily driven by the hope that people will be exclusively buying software from the Microsoft App Store, and tablets/phones from Microsoft. During the preview, those of us using traditional PCs complained bitterly that Microsoft wasn't undoing the whole touch-centric thing enough, dumbing down the operating system and getting rid of individual controls over the machine. The good upshot of this whole "Windows as a service" thing is that maybe now Microsoft will start folding in changes to focus it back more on PCs. Having them basically admit that the Nokia thing was a bad idea and that they're giving up on Windows Phone except in niche markets is a good first step.
It takes a lot for a large company to admit big mistakes, and usually they've burned through massive amounts of money and goodwill by that time. Look at HP's writedown of Autonomy, or Microsoft's writedown of aQuantive (or whatever they're called.) Or, look at IBM's near-death experience in the 90s, or Apple's for that matter. There's plenty of examples like that. The question is whether there's enough left to turn things around. Some companies do a good job, others are mixed. Apple is an obvious success story. IBM is currently selling itself off piece by piece, and trying to morph into some kind of white-shoe management consulting firm. They still have massive amounts of money (and revenue) to burn through, but I'm never going to think of IBM again the same way they were thought of before the 90s. We'll see if Microsoft ends up the same way!
The impairment charge works out so they are paying about $974,000 per employee to lay them off. Too bad the former employees aren't the ones getting that money.
Remember, Microsoft has been suing droid phone makers and makes a tidy annual profit from those deals. It also pushed Google over the edge to buy Motorola and develop its own arsenal to help defend droid phone makers. Also, while a write down is usually not a good thing, it does carry with it some tax benefits in the present as well as years to come.
It doesn't matter whether those sales were from "just the faithful". THEY WERE SALES.
but wow their business model and strategy seems to be solid while MS is a cluster fuck. How times have changed.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
Microsoft bought Nokia to get them out of the Android ecosystem, was it worth it at $7.6 billion?
For me, it's because the brand name is poison.
I think that's true among many geeks but most people are basically indifferent to Microsoft. Unlike Apple which (deserved or not) seems to get much love from the general public, Microsoft generally gets about as much attention as the water company. People just don't care about them one way or the other.
No idea how MS can pull out of this one. I've mostly chalked it up that the sun is setting on the Microsoft empire, and someone new is going to take over the 2020's.
Unlikely I think. Microsoft has roughly $100B in cash. At current market caps they could buy both Ford AND GM in cash if they wanted to. They could buy a controlling stake in Amazon or Oracle in cash. Microsoft isn't going anywhere unless they are criminally stupid and I don't think they are. They might have to buy their way into a very different industry but they have the means to do that. Their cash cows (Windows and Office) might disappear and their margins are likely to suffer but the company will survive in some form or fashion.
When is Apple going to publish current iWatch sales figures? The new product is cratering, a dismal failure. Word is getting out, the thing is a dud.
There doesn't seem to be clear evidence one way or the other. Personally I don't much care but we'll find out in due course. I suspect it is probably selling fine but it never was going to sell like the iPad or iPhone. Most likely it will take a generation or two to really hit its stride like most Apple products.
Apple is still selling phones, but most of us* aren't willing to spend that much on a phone.
Given that their sales figures keep going up, so far the evidence seems to show that isn't true. Furthermore they haven't even really hit their stride in quite a few less mature markets like China.
I use a Nokia that I bought at Radio shack for $69 and a $35/month Virgin Mobile no-contract service. People are gonna figure it out. Even Apple customers, eventually.
That's fine but there is not a single Nokia product that I'd seriously consider buying. Just doesn't fit what I need/want. Clearly most people seem to feel the same way. Apple customers aren't idiots - they just want something different than you do. Nothing wrong with what you want and nothing wrong with what they want.
Do you own one? The Surface is known for overheating, a noisy fan and since it is likely most of your apps are Windows desktop apps, the user interface for what you are actually using is not really ideal.
No, I don't own one, by the way.
http://www.infoworld.com/article/2873112/mobile-technology/microsoft-may-have-finally-solved-the-big-problems-with-surface-pro-3.html
They are writing off *more* than they paid for Nokia, pretty much saying Nokia was worse than worthless...
by the sound of it, Nokia was doing a fairly good job at destroying themselves anyway, MS did't really need to help.
Now that Microsoft is becoming a patent troll, they don't actually need employees anymore...
http://www.nbc.com/saturday-night-live/video/total-bastard-airlines/n10561
Buh-Bye
Basically the announcement reads "We want Windows Phone to be delivered the way Windows on the PC always has been: by every OEM out there".
Which probably will never happen so yeah, a distinction without a difference. I have no idea why a handset vendor would want to pay for Windows when they can get Android basically for free. The economics of it make no sense. There is almost zero retail demand for a Windows based handset and two very entrenched competitors with deep bank accounts and better public images. Microsoft's PC model simply cannot work in mobile I think. They can't afford to compete on price with Google since Google is giving Android away so the only realistic option is to go vertical like Apple. But since they don't have the brand Apple has that isn't looking great either. Their only real option is to tightly integrate with their PC platform which has gotten them in anti-trust hot water in the past.
They can talk a big game all they want but there has been essentially zero uptake by handset makers for several years and why on earth would they want to compete with Microsoft directly on the Windows platform? A big part of the reason Android remains popular is that Google has had the good sense to largely just produce reference hardware and mostly stay above the fray.
The 7800 that MS is laying off now is in addition to the 18,000 MS decided to lay off last year.
Yet MS continues to lobby congress for more visa worker because of desperate shortages of workers.
Microsoft's hypocrisy could not be more brazen, but congress will look the other way.
but for tablet use they are just too darned heavy. When I hold one like a tablet I think, "where can I put this down" because it's too heavy to just nonchalantly carry like a tablet.
And then when you try to use it like a laptop, you say, "what is with this terrible keyboard" and "why can't I use it as an actual lap-top"
The Surface is like a Pontiac Fiero, trying hard to be two things at once and not doing either of them particularly well.
How does Microsoft spell Autonomy? N-o-k-i-a.
I was working for the Nokia Mobile Phones division from the beginning of 2012 until MS closed the deal at the end of April, 2014. Despite many assurances that our jobs were "secure" by MS, two weeks after the deal closed, they laid off or fired almost 13000 of us. Now another 8000? Why am I not surprised? If MS were capable of telling the truth, NO one would purchase an MS product or operating system! They cannot be trusted and if you trust your data to them, you are toast!
Steps:
a) install your "man" as the VP
b) make your "man" as CEO a condition of sale for the company
c) buy a company that wasn't interested in running your OS and cancel other, popular OS projects, and the most popular phone OS in the world
d) wait 3 yrs
Non-profit!
For a variety of reasons, some of them good ones - no.
Put yourself in their position, you've come halfway around the world to take a job you can't back out of, even if you get treated badly, or you get deported. You really want it to be a two way street and it to be hard to be fired from such a position.
Of course such indentured servitude should never have been allowed in nearly every case but that's a different story. There's a lot of skilled people looking for work despite the pretended "shortage" where the confected story is that there is no choice other than to bring in cheaper people from overseas.
It's better because it has a better UI, is more stable, and does much more by itself without needing extra "apps".
Better UI is subjective and personally I disagree with you on that. Most people really don't give a shit as long as it doesn't get in their way. People are familiar with iOS and Android and familiarity counts for a lot even if it isn't necessarily the most optimal way to do things. Look at how much hate Windows 8 has received even though in some cases it does make some improvements.
I have seen no objective evidence that Windows Phone is more or less stable than Android or iOS devices. You'll need to present some actual objective data for me to concede that point. Something more than your personal experiences.
As for doing more without extra apps - even if that were true (which I doubt), what does it do that makes having the feature built in versus in an app matter for?
Again, I don't understand why people don't buying them over Android.
Because Android is more available, less expensive to handset makers, does everything Windows Phones do, and was earlier to market, has a more robust ecosystem of apps and accessories, and is more familiar to consumers. Microsoft to all appearances has come out with a device that is fine but doesn't actually best the competition in any way that truly matters.
They're subsidizing the phones right now, but I'd happily pay more for a Windows Phone because it's a much better product, in my opinion.
And that's a fine opinion to hold but understand that most people do not agree with you. I wouldn't pay a penny more for a Windows Phone and given Microsoft's history I would personally need a very steep discount to even consider it.
Google's model is to tie their platform to their other platform. The Google Play apps and the Play Store must be installed on Android systems for them to be called Android. All of those tie back to Google
And what is your point? Google introduced Android basically as a defensive play to keep Microsoft and Apple and Blackberry from shutting them out of the mobile ad market. They don't need to make money directly on Android because they make their money elsewhere. Microsoft DOES need to make money on Windows because they do not have an alternate revenue stream.
While you're saying they won't succeed, that's not the same as saying that what they want to try is the same as what Apple's doing.
They won't do exactly the same thing as Apple but they are VERY unlikely to succeed selling software to an entrenched competitor giving away software for free. Their only hope for that to work is to somehow leverage their desktop OS and office suite monopolies and that is likely to be a big no-no given their prior anti-trust convictions.
Basically the reasons Microsoft is pushing so hard on the Metro interface is that they are trying to get a single interface for all devices. In principle this makes sense. Reduced learning curve, immediate familiarity whether using a PC or a tablet, etc. In practice it's a hard trick to pull off. But if they can get a critical mass of people to like it then they have a chance. It's only real way to leverage their desktop monopoly without getting into legal hot water.
Giving up most of the Nokia hardware business means they've given up on the vertical single-source solution pretty thoroughly.
That just means that they bungled the acquisition. They should have done it years earlier instead of waiting until Nokia wilted on the vine. Microsoft's strategic position isn't improved by them giving up on Nokia. I don't see any way for them to realistically displace Google with the third party handsets unless Google really drops the ball. And so far Microsoft has been very bad at making their own hardware. The only way I really see out of this for them is for them to tap their cash hoard and make a very smart acquisition of some sort.
Better UI is subjective and personally I disagree with you on that. Most people really don't give a shit as long as it doesn't get in their way. People are familiar with iOS and Android and familiarity counts for a lot even if it isn't necessarily the most optimal way to do things. Look at how much hate Windows 8 has received even though in some cases it does make some improvements.
I'm not a UI expert, but I kind of thought that we had moved past the "whole lot of random icons on the desktop" that my father used in 1995, but hey, whatever floats your boat. I personally don't have the time or interest to hunt through pages of icons for every little thing I need to do.
I have seen no objective evidence that Windows Phone is more or less stable than Android or iOS devices. You'll need to present some actual objective data for me to concede that point. Something more than your personal experiences.
I really have no interest in convincing you or anybody else. People with Android and iOS reboot their phones frequently. I don't. Enjoy rebooting.
I don't respond to AC's.
Jerry, its a write-off...