Microsoft purchased Nokia’s mobile phone business in a deal which cost the company $7.6 billion and now Microsoft has announced that it is writing down the $7.6 billion.
The company also announced that it would be scaling back its mobile phone business and is laying off around 7,800 staff.
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.”
Microsoft will record a charge in the fourth quarter of fiscal 2015 for the impairment of assets and goodwill in its Phone Hardware segment, related to the NDS business. This charge has no impact on cash flow from operations and is nondeductible for income tax purposes. Based on the new plans, the future prospects for the Phone Hardware segment are below original expectations. Accordingly, the company concluded that an impairment adjustment of its Phone Hardware segment assets and goodwill of approximately $7.6 billion is required.
Where this will leave Microsoft’s Windows Phone platform remains to be seen, as soon as we get some more details on exactly what the company has planned for the future of their Windows Phone hardware, we will let you guys know.
Source Microsoft
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