Microsoft has announced plans to restructure its phone hardware business, including the elimination of 7,800 jobs. The restructuring effort will result in a one-time charge of $7.6 billion related to assets acquired with Nokia's Devices and Services divsion, a deal that was finalized only 15 months ago. It will also take a restructuring charge of between $750 million and $850 million. The company says these changes should be mostly completed by the end of 2015, and completely finalized by the end of its next fiscal year.
An additional charge related to the "impairment of assets and goodwill in [Microsoft's] Phone Hardware segment" will be recorded in the company's FY15 Q4 earnings announcement, which will be released July 21.
In an email to employees, CEO Satya Nadella provided his reasoning for the changes. "We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family," he said. "In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."
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