Microsoft CEO Email To Employees On Sharpening Business Focus

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This e-mail to employees from Satya Nadella says that Microsoft will be taking a $7.6 billion impairment charge and cutting 7,800 employees, most of which are in the company's phone business. :eek:

I want to update you on decisions impacting our phone business and share more on last week’s mapping and display advertising announcements. We anticipate that these changes, in addition to other headcount alignment changes, will result in the reduction of up to 7,800 positions globally, primarily in our phone business. We expect that the reductions will take place over the next several months.

Today, we announced a fundamental restructuring of our phone business. 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.
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So exactly what are they up to?

I've got a current Nokia Lumia and I'm pretty dang impressed with the integration they have managed with Windows 8.1 and Phone 8.1

I'm actually looking forward to Phone 10... and by extension Windows 10 for even more polish to that.

Hopefully, they aren't throwing in the towel now. They're so close to having something great here.
 
Everyone I know that has actually used Windows phone has said it was fantastic.

Unfortunately, if they had quietly bought up Nokia and released the same exact operating system without any Windows branding then it probably would have been 10x more successful.
 
Tengis said:
Everyone I know that has actually used Windows phone has said it was fantastic.

Unfortunately, if they had quietly bought up Nokia and released the same exact operating system without any Windows branding then it probably would have been 10x more successful.
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Unlikely, Nokia was doing terribly when MS bought them out,
 
I think the last time Nokia had a chance to turn themselves around was around the time they noticed Symbian was failing horribly. Had they jumped on the Android train at that point they'd probably still be around. I would have been interested in a Lumia running Android.
 
I was really disappointed when I read this. I love my Windows phone.
 
You must be a swift and nimble speedboat to keep up with the cell phone industry. Microsoft is more of a cruise liner or barge...
 
I really hate the wording of these types of letters. I guess they have to keep it professional, positive and full of buzzwords/phrases like "innovative, committed, strategy, sharpen, fundamental restructuring...etc."
 
At first when I saw the news I was disappointed however after reading it, the good news is they are not closing down their phone department. I guess that Windows 10 is the same across all devices I kinda understand the move.
 
I have a Lumia as well and love it. I don't understand Microsoft spending so much $$$ on Nokia and their phone strategy if they truly plan on exiting that market; these things take time. They can't possibly hope to displace the market leaders overnight; rather, they should try to erode market share over time.
 
mcravenufo said:
I was really disappointed when I read this. I love my Windows phone.
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I look at this like the Surface write down a couple of years ago. Obviously not good news but I think it's an acknowledgment that the current direction isn't working and that things have to change. Microsoft isn't getting out of the phone business but it probably means that phones aren't going to be a priority in and of themselves. Not todays phones at least.

They can sell enough phones to make some money and I think they're resetting the business based on what is reasonable and sustainable without significant change in current market share. And hopefully it means they push the envelope a bit more, with things like x86 desktop capable phones which I think would be a good distinction for them in the enterprise space.

This marks the day of Nadella going forward at Microsoft. It's now on him with however mobile works out, Windows 10, etc. It looks like he's doing what had to be done now it's a matter of how well it works out.
 
Advil said:
I'm actually looking forward to Phone 10... and by extension Windows 10 for even more polish to that.
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No. Try the preview (try a phone you don't like much). Slow, unresponsive, shit locks up. Looks great, though. Just can't do shit on it. Lumia 928. Great phone on WinPho8.1. Excellent phone. I don't want to trade from Windows Phone to any other. I really like them. But, WinPhone10 is far from ready for prime time. I had to go back to 8.1. I usually am fine with bugs and things like that. This was way too much. Just unusable.
 
TwistedAegis said:
Apple and Samsung are swift and nimble speedboats...?
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Yes, Samsung is a speed boat. They release new hardware so often their phones are almost disposable. The SGS7 is right around the corner I hear. :)

Apple is a high speed yacht. They aren't as fast to release new hardware, but you get quality, comfort and style over speed.

Microsoft is a barge. They're big, bulky and slow. They suck up businesses, slap a fresh coat of paint on them and liquidate them after not making a quarterly/yearly profit.
 
heatlesssun said:
I look at this like the Surface write down a couple of years ago. Obviously not good news but I think it's an acknowledgment that the current direction isn't working and that things have to change. Microsoft isn't getting out of the phone business but it probably means that phones aren't going to be a priority in and of themselves. Not todays phones at least.

They can sell enough phones to make some money and I think they're resetting the business based on what is reasonable and sustainable without significant change in current market share. And hopefully it means they push the envelope a bit more, with things like x86 desktop capable phones which I think would be a good distinction for them in the enterprise space.

This marks the day of Nadella going forward at Microsoft. It's now on him with however mobile works out, Windows 10, etc. It looks like he's doing what had to be done now it's a matter of how well it works out.
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At the ignite conf they were pushing win10 and its "universal" apps hard (and Azure).

I think you are right they are stepping back from phones...

Though I think only to push Win10 and universal apps, and IF they can get vendors to use their store, they will then hopefully use the desktop leverage to pump phones again.

Personally I think they are going to have a tough time pushing universal apps... they are trying to bridge use of x86 apps with some support in the store and "easy" conversion methods but I don't think that will be enough. Even before you start talking about MS's "cut".

I don't think they truly understand what kind of apps are out there (or more likely putting fingers in ears and yelling lalala la).
 
Ur_Mom said:
No. Try the preview (try a phone you don't like much). Slow, unresponsive, shit locks up. Looks great, though. Just can't do shit on it. Lumia 928. Great phone on WinPho8.1. Excellent phone. I don't want to trade from Windows Phone to any other. I really like them. But, WinPhone10 is far from ready for prime time. I had to go back to 8.1. I usually am fine with bugs and things like that. This was way too much. Just unusable.
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Amen to that. I ran the preview as well, on the fast ring, and it was a jarring experience. I totally accepted that its beta, but basic thing would just stop working like Internet connectivity, etc. I'm going to wait for them to sort all that nonsense out.
 
If they release 3 phones a year low mid high, it will be enough. Personally I would love to see more atom phones :)
 
Also when you have more people and more departments things run slower and that has been a big problem with the mobile division. Few people quicker turnaround times, thats how I see it.
 
heatlesssun said:
I look at this like the Surface write down a couple of years ago. Obviously not good news but I think it's an acknowledgment that the current direction isn't working and that things have to change. Microsoft isn't getting out of the phone business but it probably means that phones aren't going to be a priority in and of themselves. Not todays phones at least.

They can sell enough phones to make some money and I think they're resetting the business based on what is reasonable and sustainable without significant change in current market share. And hopefully it means they push the envelope a bit more, with things like x86 desktop capable phones which I think would be a good distinction for them in the enterprise space.

This marks the day of Nadella going forward at Microsoft. It's now on him with however mobile works out, Windows 10, etc. It looks like he's doing what had to be done now it's a matter of how well it works out.
Click to expand...
I think I heard that MS will be releasing less models per year...the example was something like... 2 types for low end , 2 for med & Buiz then 1-2 for high end . so that's 4-8 hard ware types per year . I wasn't sure if the Med end and buiz end were one and the same or different. 3rd party phone makers will be able to make as many models as they see fit. They look to as if they are going to concentrate on specific things phone related and go from there... The new 640 MS phone is a surprise hit and shows MS is actually trying to make a stable grounded step into the phone market. So if this is a small step in where they are headed with their own branded phones at the low end then over time they may see a steady tick / increase in the market.
 
I will laugh so hard I might pee my pants if Windows drops out of the phone market.

I swear to god they are run by idiots. Granted, I don't have all the info they do, but there is no way that the public that thinks MS should do is so disconnected to what the "reality" is that drives their decisions.
 
OEM said:
I will laugh so hard I might pee my pants if Windows drops out of the phone market.

I swear to god they are run by idiots. Granted, I don't have all the info they do, but there is no way that the public that thinks MS should do is so disconnected to what the "reality" is that drives their decisions.
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They wont drop it and it was run by some "idiots" as you say.
 
Satya Nadella still 'committed' to Microsoft's phone business despite layoffs.
 
Windows 10 could of been a lot better I suppose they are laying off the entire team who created it.
 
heatlesssun said:
I look at this like the Surface write down a couple of years ago. Obviously not good news but I think it's an acknowledgment that the current direction isn't working and that things have to change. Microsoft isn't getting out of the phone business but it probably means that phones aren't going to be a priority in and of themselves. Not todays phones at least.
Click to expand...


Phones not being a priority are why MS is in the shit mess they are in now, and exactly why they cannot get out of it.

MS needs to make phones a priority and they need to be willing to commit years of losses to breaking in. Just like they did with Xbox.
 
pavementeater said:
I think I heard that MS will be releasing less models per year...the example was something like... 2 types for low end , 2 for med & Buiz then 1-2 for high end . so that's 4-8 hard ware types per year . I wasn't sure if the Med end and buiz end were one and the same or different. 3rd party phone makers will be able to make as many models as they see fit. They look to as if they are going to concentrate on specific things phone related and go from there... The new 640 MS phone is a surprise hit and shows MS is actually trying to make a stable grounded step into the phone market. So if this is a small step in where they are headed with their own branded phones at the low end then over time they may see a steady tick / increase in the market.
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lol MS releases like 1 phone every 2 years that's is high end. The problem is they need an actual high end phone. Everyone in the management of the phone division needs to be fired outright right now today. They need to bring in all new people maybe even someone whom is completely naïve. MS has no high end phones all the produce are plastic sealed battery toys with fruity colors why? No one freaking knows. They need to bring out a surface phone now or yesterday that can trade blows with the galaxy note.
 
7.6 billion write down on a 7.2 billion acquisition.

You're doing acquisition wrong, Microsoft
 
rudy said:
Phones not being a priority are why MS is in the shit mess they are in now, and exactly why they cannot get out of it.

MS needs to make phones a priority and they need to be willing to commit years of losses to breaking in. Just like they did with Xbox.
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What they need to do is focus on something that's unique. Like an x86 Surface Phone or devices that can leverage something like that. They were making too many cheap phones with not enough distinction between themselves and the rest of the market.
 
OregonLAN said:
Apple is a high speed yacht. They aren't as fast to release new hardware, but you get quality, comfort and style over speed.
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No, Apple is more like the fancy expensive yacht that cruises around the harbor, so the rich guy sitting in the back can wave to show off how important he thinks he is :)
 
FM 3370 said:
I really hate the wording of these types of letters. I guess they have to keep it professional, positive and full of buzzwords/phrases like "innovative, committed, strategy, sharpen, fundamental restructuring...etc."
Click to expand...

You should hear MS people in meetings. It gets worse. This is an actual quote that I heard once. I spout it off every so often when I'm feeling whimsical. :D

"Ping me when you have some spare cycles, and we'll crystallize our road-map." -random MS co-worker from my past
 
What about Synergy?

I hate buzzwords like that. Management is usually the ones that use them, too. Us grunts use the real words. "Let's go grab a beer and talk about why this shit doesn't work.".
 
Ur_Mom said:
What about Synergy?

I hate buzzwords like that. Management is usually the ones that use them, too. Us grunts use the real words. "Let's go grab a beer and talk about why this shit doesn't work.".
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That's a real sentence :) I prefer it.

I don't mind synergy in a real context but yeah, when a filthy marketeer says it... Ugh...
 
Luckily I don't work there anymore. I work at a place where we just get shit done. Couldn't be happier about that.
 
PCunicorn said:
Unlikely, Nokia was doing terribly when MS bought them out,
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That's simply not true. Nokia's smartphone division had just had its most profitable quarter ever. Sure, Apple were taking all the press, but Nokia wasn't doing badly. Furthermore, it had a good plan to replace Symbian with MeeGo, which looked great on the N9.

Then along comes Microsoft's Elop, who announces they're retiring Symbian. He did this over a year before they actually had a Windows Phone device on the market, which essentially left them with nothing to sell for a long time and sent their profitable smartphone division into a massive loss. So despite what you say, Nokia weren't doing terribly until Elop took over.

I don't even understand the purpose of the whole operation. Microsoft bought Nokia, sacked most of the workers and discarded the Nokia brand name. What was the point in buying the company if they've thrown away everything they've bought?

The deal was bad for Nokia (destroyed a decent company), bad for Microsoft (wasted $7.6billion) and bad for the consumer (lost the opportunity to use MeeGo which I'd much rather have over Android).
 
Mr Milquetoast said:
That's simply not true. Nokia's smartphone division had just had its most profitable quarter ever. Sure, Apple were taking all the press, but Nokia wasn't doing badly. Furthermore, it had a good plan to replace Symbian with MeeGo, which looked great on the N9.

Then along comes Microsoft's Elop, who announces they're retiring Symbian. He did this over a year before they actually had a Windows Phone device on the market, which essentially left them with nothing to sell for a long time and sent their profitable smartphone division into a massive loss. So despite what you say, Nokia weren't doing terribly until Elop took over.

I don't even understand the purpose of the whole operation. Microsoft bought Nokia, sacked most of the workers and discarded the Nokia brand name. What was the point in buying the company if they've thrown away everything they've bought?

The deal was bad for Nokia (destroyed a decent company), bad for Microsoft (wasted $7.6billion) and bad for the consumer (lost the opportunity to use MeeGo which I'd much rather have over Android).
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That was long before MS bought them out......
The truth might hurt but MS was probably more interested in just making sure they owned a metric shit ton of patents in mobile than seriously trying to bring a battered brand back to its former self. Basically if MS owns enough patents then they always have a chance of pushing their way back into mobile.
 
Ur_Mom said:
No. Try the preview (try a phone you don't like much). Slow, unresponsive, shit locks up. Looks great, though. Just can't do shit on it. Lumia 928. Great phone on WinPho8.1. Excellent phone. I don't want to trade from Windows Phone to any other. I really like them. But, WinPhone10 is far from ready for prime time. I had to go back to 8.1. I usually am fine with bugs and things like that. This was way too much. Just unusable.
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Latest build runs well on my 1520.
 
Freebo said:
They wont drop it and it was run by some "idiots" as you say.
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No, its still run by idiots. Shuffling the deck chairs on the Titanic wont save the ship. Julie Larson-Green still has a custom executive position while thousands of employees are getting the axe... how long do you think you'd keep your job if your response to widespread customer complaints and dismal sales was to tell users 'get over it and move on?'
 
ndows phone is one of the biggest technology failures in history. 7.6 Billion plus another 850 Million written off and flushed down the toilet. Coupled with the aQuantive disaster and it's close to a 15 Billion dollar fiasco. Stephen Elop who once stood on a burning platform has now been sucked into the the Black Hole that Windows Phone has created. Over 10,000 jobs lost all because of stupid decisions this man and this company have made. The one saving grace is that Nokia got 7.2 Billion to restart their Android phone business in 2016.

Microsoft's Q4 numbers are going to be a blood bath. if you're an investor it's time to sell or short them. They are going to lose more Billions in market cap once they report their numbers.
 
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