Microsoft is laying off 1,850 to “streamline” its smartphone business, takes $950M charge
Following last week's news of Microsoft selling off its feature phone business for $350 million, today Microsoft turned its attention to smartphones: the company announced it would lay off 1,850 staff …
Context & Ripple Effects
This is the second act of Microsoft's retreat from the phone business it bought with Nokia. A year earlier the company had already announced 7,800 job cuts mostly in the phone business alongside a $7.6B write-off of the Nokia deal, so today's 1,850 layoffs and $950M charge are a continuation, not a fresh decision.
It also lands one week after Microsoft sold its feature phone business for $350 million — shedding the low-end hardware first, then cutting the smartphone organization around what remains. Two months later, SEC filings showed the cuts widening further.
First-order effects
- 1,850 Microsoft employees — concentrated in the smartphone business — lose their jobs immediately, and the company absorbs a $950M restructuring charge on top of the prior year's $7.6B Nokia write-off.
Second-order effects
- The restructuring does not stop at smartphones: by late July, filings showed Microsoft planning 2,850 additional layoffs across mobile and sales divisions, extending the Nokia unwind into parts of the company well beyond handset engineering.
Third-order effects
- The pattern — a mega-acquisition written off within a year, followed by successive waves of charged layoffs — establishes restructuring charges as a recurring tool at Microsoft rather than a one-time correction, a playbook visible again in the 2023 memo announcing 10,000 layoffs with a $1.2B charge.
The trend: Microsoft's phone retreat is one data point in its longer shift away from acquired consumer-hardware headcount toward repeated, charge-backed restructurings aligned to whatever priority dominates each era.