Ever since CEO Satya Nadella took the reins of Microsoft, he has been striving to transform the company with the ‘Cloud-first’ and ‘mobile-first’ strategy. Though Nadella has played the Cloud and Enterprise software cards well, looks like investors are still concerned over the weakening sales of Windows and the obviously bleeding phone business.
The latest announcement reveals the company’s plans to cut 7,800 jobs, or nearly 7 percent of its workforce, and write down about $7.6 billion related to its Nokia phone business. This is in addition to the 18,000 job cuts the company had announced in July 2015.
In a memo dated July 17, 2014 Nadella had said, “We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months. It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas.”
It was in 2011 that Nokia’s Symbian magic started fading and it couldn’t match up to the growing love for Android and iOS. Meanwhile, Microsoft’s late entery into the mobile world made the search giant struggle with the initial releases of Windows Phone failing miserably. For both companies, it seemed like a match made in heaven to team up and fight against the growing popularity of Android and iOS. For many analysts and tech experts, it seems like bad move by Microsoft that is now inherited by Nadella and he is trying to make the best of it.
However, Nokia and Microsoft’s partnership goes way beyond the time both the companies inked the deal. Here’s a quick timeline:
2009
Stephen Elop, who later became the Nokia CEO, worked at Microsoft was a part of the company’s mobile Office efforts. In 2009, Microsoft and Nokia signed one of their earliest partnerships by building a mobile Microsoft Office version for Nokia’s Symbian devices.
2010
A year later, Elop replaced Olli-Pekka Kallasvuo as the Nokia CEO. Prior to that he was the head of Microsoft’s Business division. It was in 2010 that Nokia started suffering losses owing to wide acceptance of Android. Samsung had started invading the low to mid-end markets which were once dominated by Nokia.
(Also read: Timeline showing the fall of Nokia)
2011
Microsoft and Nokia announced Windows Phone partnership with the hope to put an end to the two-horse race – Google’s Android and Apple’s iOS. Sparks about an eventual Microsoft-Nokia merger had started. It was later this year that the Lumia phones were launched with both Nokia and Microsoft apps.
2012
In 2012, Microsoft shows off the Windows Phone 8. Though Windows Phone ran on phones built by other companies too, Ballmer made it quite clear that Nokia takes the top spot in Windows Phone sale.
2013
There were wide speculations about Microsoft’s plans to build a Windows Phone, but several reports citing Microsoft spokespeople said that the Nokia-Microsoft partnership is strong enough and the company doesn’t need to build its own phones. It was this year that the Lumias started attracting a considerable number of customers with its flashy colours, camera capabilities and Microsoft’s software. After a string of rumours, eventually came the big announcement of Microsoft acquiring Nokia Device and Services for $7.2 billion. An amount significantly less than what the Redmond company paid for Skype in 2011.
According to the terms of the agreement, Microsoft paid 3.79 billion euros to purchase the Finnish company’s devices and services business, and 1.65 billion euros to license Nokia’s patents, for a total transaction price of 5.44 billion euro (approx $7.2 billion) in cash.
April 2014
In April last year, Microsoft officially announced to have completed the acquisition of the Nokia Devices and Services business. As part of the transaction, Microsoft was to honour the existing Nokia customer warranties, beginning April 25, 2014. Approximately 25,000 employees were transferred to Microsoft from around the world. It was also followed by Elop’s infamous job cuts email to employees.
It was this year that Microsoft appointed India-born Satya Nadella as its CEO. In the bid to help the struggling company bounce back, he announced various mobile-centric reformations and also an email informing employees about job cuts. The announced about 18000 job cuts last year, mostly in the Nokia part of the business.
By the end of 2014, the company had started making changes to its smartphone division including the introduction of the all-new ‘Microsoft Lumia’ branding.
2015
Stephen Elop parted ways with Microsoft and many analysts believe Microsoft will write off all or part of the $7.2 billion it paid for Nokia’s handset unit last year. The deal left Microsoft with a money-losing business and mere 3 percent of the smartphone market. This may have compelled Nadella to announce another 7800 job cuts. Looks like, Nadella is now trying to turn a page on the Nokia acquisition. The company is also pinning hopes on the upcoming Windows 10 platform.
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