Microsoft's restructuring of their phone business was necessary, obvious, and good for Lumia

This morning, Microsoft announced that 7,800 employees, mostly in the phone division, will be let go from the company. Moreover, they are taking a $7.6 billion write-down of the company’s acquisition of Nokia’s Devices and Services division from 2014. Putting aside the sad fact that nearly 8,000 talented people are being let go very soon, the rumor of a write-down had been circulating since Microsoft’s last investor meeting and is not a surprise.

There is no real positive way to spin the write-down news, but it is also not unheard of in business. Nor is it clear what the alternative to buying Nokia at the time would have been.

Nokia was already in dire straits, and their board was getting itchy for alternatives. Had Nokia decided to jump all-in on Android devices – or worse – sold to a competitor, neither would have been good for Microsoft and their Windows Phone story. Since Nokia Lumia phones account for 97 percent of all Windows Phones out there, Microsoft had a gun to their head. What would have happened if Nokia fell into Samsung, LG, or even HTC’s hands?

Source: iMore

About Bhavesh Rabari

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