Dive Brief:
- Microsoft is taking resources away from its phone group with a recent layoff of 7,800 employees.
- The recent headcount reduction follows earlier layoffs involving Nokia smartphone personnel it took after an acquisition.
- The Redmond tech giant is also writing off the $7.6 billion Nokia acquisition.
Dive Insight:
Microsoft might not completely be leaving the mobile space, but recent moves suggest it is reacting to current market conditions. NetMarketShare research looking at smartphones and tablets found Android at the top of the heap with 51% of the mobile OS market, Apple’s iOS was second at almost 41%, and the rest lagged far behind: Java ME (commonly found on lower-end phones) came in at 3.2% and Windows held only 2.3% market share. Last year Microsoft began laying off Nokia smartphone employees, and now announced another 7,800 people cut, mostly from its phone group. The company is also writing off the $7.6 billion Nokia acquisition.
According to Microsoft CEO Satya Nadella, the company is focused on productivity, and the phone group will be part of the new Windows and Devices Group. He said Windows’ future phone efforts will fit into three categories, “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.”
AOL also recently took over Microsoft's ad business, signing a 10-year deal to transfer Microsoft’s display ad business and 1,200 employees to AOL. The stipulations allow AOL to serve ads on its own sites as well as Microsoft's, including the Xbox gaming console -- positioning its ad packages for more potential advertisers.