Microsoft is expected to lay off nearly 2,000 people after its disastrous acquisition of Nokia’s smartphone business as it dawns on the software giant that it’s never going to make headway in the market.
Both Microsoft and Intel seriously believed at one time that they could stitch up the smartphone business as effectively as they controlled the PC business at one time.
But the hard fact that both firms are beginning to recognise is that they haven’t a snowball in hell’s chance of gaining a grip on this sector of the IT market.
Microsoft’s latest announcement today that it will lay off 1,850 people follows an Intel announcement just a few weeks back that it would lay off 11 percent of people to make ends meet.
The giants have taken a while to wake up to the uncomfortable fact that neither of them really matter in the slightest in an industry dominated by cheap chips and better products.
Microsoft bought Nokia’s smartphone business for a colossal $7.2 billion just two years ago and last year cut nearly 8,000 jobs.
The latest job cuts will come in Finland and the $950 million it writes off today will mean it has to pay nearly a quarter of that sum in redundancy payments.
Last week Microsoft said it would sell off a chunk of its phone business to a division of Taiwanese manufacturing giant Foxconn.