HYDERABAD:As part of a restructuring exercise, Redmond-based Microsoft Corp said it will layoff 7,800 employees globally, primarily in the phone hardware business.
According to sources, India staff too may come under the axe, though this number is expected to run into just a few hundreds.
When contacted, a company spokesperson didn’t deny the possibility but said, “We are not sharing the country-wise retrenchment details.”
The fresh layoff exercise is over and above the 18,000 job cuts Microsoft had announced last year.
Currently, Microsoft employs over 6,500 across India, of which a majority are associated with software development, including over 3,000 at its facility in Hyderabad — the largest development centre outside Redmond. As of March 2015, Microsoft had 1, 18,000 employees worldwide.
Microsoft was to add 32,000 employees globally following its acquisition of Nokia’s handset business. However, due to regulatory hurdles, the Nokia India plant, which employed 6,600, was excluded from the deal.
According to Microsoft, it was restructuring its phone hardware business to better focus and align resources.
“As a result, the company will record an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services (NDS) business in addition to a restructuring charge of approximately $750 millon to $850 million,” it said in a statement.
In an email to employees, Satya Nadella, CEO, Microsoft last month indicated that the company has to make some tough choices in areas where things were not working and solve hard problems in ways that drive customer value.
The move to issue pink slips comes at a time when the company is on the verge of releasing a new version of its Windows Operating System for desktops, smartphones and other devices.
The company counts 1.5 billion as Windows customers spanning 190 countries, but its devices business, particularly, smartphones, failed to gain market share both in India and globally.
“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,” Nadella said in the statement.
Based on the new plans, the future prospects for the phone hardware segment are below original expectations. Accordingly, the company concluded that an impairment adjustment of its phone hardware segment assets and goodwill of approximately $7.6 billion is required.