Microsoft Finally Decides to Write off Its $7.6 billion Nokia deal

When software giant Microsoft decided to buy-out the struggling Finnish based Nokia Corporation for $7.6 billion there were many who were skeptical of the deal because Microsoft had an enormous challenge of first turning the company around and then trying to establish its presence in the mobile phone sector market that was dominated by Apple and Samsung.

Microsoft recently announced that it plans to re-organize its Windows phone unit and as a result planned to cut around 7,800 jobs. This is the second time that Microsoft is making thousands of people redundant in its struggling phone division as the first round of job cuts happened in 2014 when the company sacked as many as 18,000 employees.

It’s clear that the Nokia acquisition hasn’t panned out the way Microsoft would have expected. Since acquiring Nokia and working on its windows phone platform, Microsoft has only managed to capture 3.2% of the global smartphone market in 2015 based on an IDC survey.

Satya Nadella, chief executive officer of Microsoft sent out a statement to his employees saying “I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. 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.”

Microsoft had sacked former Nokia chief Stephen Elop back in June 2015 along with a few other top leadership officials in an effort to re-structure the company.