The job cuts and $950 million writedown will come from its smartphone unit, but Microsoft insists it's not hanging up on that business. Fred Katayama reports.
Microsoft's smartphone business keeps getting smaller. It's cutting another 1850 jobs - mostly in Finland. And it'll write down nearly a billion dollars. This comes on top of the 7800 jobs it cut in its handset unit last summer and a $7.5 billion write down. The writedowns of the phone business it bought from Nokia in 2014 exceeds the $7.2 billion it paid for it. Nokia was once the worldwide leader in cell phones, but that handset business continues to decline under Microsoft's ownership. Witness last week's report from research firm Gartner: Global sales of smartphones using Microsoft's Windows operating system has shrunk to 0.7 percent in the first quarter this year from 2.5 percent last year. Just last month, Microsoft sold its entry-level phone business but said it would continue to develop its Lumia smartphones. The company insists it's not hanging up on the phone business. Wunderlich Securities senior analyst Robert Breza wonders how Microsoft's move to shrink its phone business squares with Nadella's emphasis on the mobile business, saying, "The only thing Nadella has to answer to investors is, 'You talked to us about your Mobile First strategy. What are you doing?'" Separately, a Finnish union rep says Nokia could cut up to 15,000 jobs globally after it acquires Alcatel-Lucent.