Microsoft (NASDAQ:MSFT) said today that it would cut 7,800 jobs, or nearly 7 percent of its workforce
Most of the cuts are connected to the company's phone business.
The company will also take an impairment charge of $7.6 billion related to its acquisition of Nokia's handset business for more than $7 billion, along with a restructuring charge ranging between $750 million and $850 million.
"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," Microsoft CEO Satya Nadella said in an email to employees today.
"In the near-term, we'll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."
Microsoft had 118,600 employees as of March 30, with about 60,000 of those workers in the United States.
This is Nadella's second major restructuring. He announced 18,000 layoffs in Nokia's devices and services business last year, following Microsoft's acquisition of the handset maker.
Steve Ballmer's purchase of Nokia was one of his most criticized deals. Analysts attacked the former Microsoft CEO for hampering the firm with an aging legacy business.
Most of the job cuts will be in the phone hardware business, underscoring the company's shift in focus to software and cloud from hardware.
About a third of the layoffs will be in Finland, where Microsoft will shut down a product development unit, according to Finland's national broadcaster YLE.
RBC Capital Markets analyst Ross MacMillan said he estimates the latest layoffs to reduce operating expenses by more than $1 billion on an annualized basis.
Shares were up 0.8 percent at $44.65 at 1:58 p.m. in New York, expanding gains in the past 12 months to 6.7 percent.