Tuesday 27 September 2016

Irish staff to avoid cuts as Microsoft axes 7,800 jobs

Published 10/07/2015 | 02:30

Microsoft CEO Satya Nadella
Microsoft CEO Satya Nadella

Microsoft's plan to cut 7,800 jobs worldwide is expected to have a little or no impact on the Irish operation, according to sources close to the company.

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The job cuts, announced by Microsoft chief executive Satya Nadella (inset), are to be concentrated principally on phone-related divisions of the company and those associated with Microsoft's acquisition of Nokia.

While some of Microsoft's 1,200 Irish employs are engaged in mobile-related activities, the company's sales, operations and software development is not expected to come in for attention with regard to the new job cuts, according to sources close to the company.

The latest employment cull comes on top of 18,000 job cuts globally announced earlier this year by Microsoft. The tech giant currently employs over 110,000 people around the world. Its Irish operation, based in Sandyford, is preparing to move into a new custom-built campus in South Dublin.

Mr Nadella also said that the company will write off $7.6bn (€6.9bn) in its Nokia phone acquisition, as well as an additional "restructuring charge" of between $750m (€679m) and $850m (€771). Microsoft will also reduce the number of phones it releases and refocus its efforts into entry-level handsets, corporate devices given to employees and niche 'Windows fans', according to sources in the company.

Strategy

The move marks one of the costliest strategic errors in Microsoft's history.

"We expect the reductions will take place over the next several months," said Mr Nadella in an email to employees.

"I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family. In the near-term, we'll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."

Last month, former Nokia chief executive Stephen Elop left Microsoft two years after overseeing the Finnish phone manufacturer's sale to Microsoft.

In Ireland, Microsoft smartphones have around 10pc market share, thanks mostly to entry-level Nokia Lumia devices that cost under €150 on prepay plans.

Irish Independent

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