Microsoft today announced that they 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 million to $850 million. Also, they announced the reduction of up to 7,800 positions, primarily in the phone business.
“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 near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility.”
Based on the new plans, the future prospects for the Phone Hardware segment are below original expectations. Accordingly, Microsoft has concluded that an impairment adjustment of its Phone Hardware segment assets and goodwill of approximately $7.6 billion is required.