Microsoft promises to cut Nokia costs as software firm reports 7pc drop in profits
Published 23/07/2014 | 08:23
Microsoft plans to turn its current loss-making Nokia phone arm to break even within two years.
The 7pc drop in quarterly profit the software firm posted today has been largely attributed to the purchase of the struggling handset unit.
Microsoft’s new CEO Satya Nadella said the company plans to take $1bn in costs out of the Nokia operation and stop its losses by June 2016.
Under a plan launched by Nadella last week, Nokia's operations are currently being drastically reduced with facilities being closed about half of its 25,000 workforce being slashed.
Microsoft bought Nokia in April for $7.2bn in an attempt to take on Apple Inc and Samsung directly in the fast-growing smartphone market.
However, Nokia's Lumia smartphones have not been as successful as the software firm originally predicted, capturing only 4pc of the global market.