Stockholm/Seattle: Microsoft Corp. plans to cut as many as 7,800 jobs and write down about $7.6 billion on its Nokia phone-handset unit, wiping out nearly all of the value of a business it acquired just 14 months ago.

The company also will record a restructuring charge of about $750 million to $850 million as it reorganizes its phone- hardware business under chief executive officer Satya Nadella, the Redmond, Washington-based company said in a statement Wednesday. Microsoft had about 120,000 employees at the end of March.

“In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility," Nadella said in the statement. The company will scale back its mobile ambitions from focusing on selling as many mobile devices as possible to concentrating on a narrower mission and set of customers to support the Windows device market, he said. Nadella wasn’t more specific and spokesman Pete Wootton declined to comment further.

The latest round of job cuts — which include 2,300 in Finland, where Nokia is based — come a year after Microsoft said it would let go of 18,000 employees, and less than two weeks after the company announced plans to exit the Web display advertising business. Since becoming CEO last year, Nadella has been acquiring mobile and cloud software makers, and cutting units not central to his strategy.

Last month, the 47-year-old executive made his biggest overhaul since taking over, revamping his leadership team to reflect a focus on three areas: personal computing, cloud platforms and productivity and business processes. As part of that announcement, Stephen Elop, the former CEO of the Nokia handset business that Microsoft bought last year, would step down.

Nokia purchase

Microsoft purchased Nokia’s handset business in April 2014 for $9.5 billion, including $1.5 billion in acquired cash. Seven months earlier, then-CEO Steve Ballmer announced plans to acquire the Finland-based unit as a last-ditch effort to gain users for Microsoft’s Windows Phone software, which had been languishing at less than 5% of the market for mobile operating systems.

The deal hasn’t boosted Windows Phone’s market share, however, and Microsoft loses money on every phone it sells, even before accounting for research and development and sales and marketing. Before Wednesday, the business had cut more than 10,000 jobs.

The writedown is Microsoft’s biggest since a $6.2 billion charge in 2012 on the purchase of Internet ad company AQuantive Inc. It took five years for the Redmond, Washington-based company to record the AQuantive charge.

Board resists

The purchase of the Nokia unit was controversial from the start. The company’s board, including then-chairman Bill Gates, rejected an earlier version of the acquisition, causing Ballmer to shout that if he didn’t get his way, he couldn’t serve as CEO, people briefed on the meeting said last year.

Several of Ballmer’s senior executives also didn’t support the proposed purchase. That group included Nadella, who at the time led the company’s server and cloud unit, the people said. Nadella later changed his mind. In March 2014, a month after being named CEO, Nadella said the deal was “the right move for Microsoft."

Once the deal closed, matters didn’t get much better. Antitrust approval caused almost an eight-month wait for Microsoft to take over the unit, during which time its results continued to erode.

The company also hasn’t realized the cost savings it anticipated. Chief financial officer Amy Hood said in April that although Microsoft had cut $2 billion off annualized operating expenses from $4.5 billion when the deal closed, the business would not, as previously predicted, reach break-even on operating basis in the fiscal year beginning 1 July.

‘Elevated risk’

Microsoft said in an April filing that it had $5.24 billion in goodwill on its books related to the Nokia business as of 31 March. The company also said the unit didn’t meet sales volume or revenue goals and that margins were lower than expected.

“Given its recent performance, the Phone Hardware reporting unit is at an elevated risk of impairment," the company said at the time.

Microsoft has gained less than 1% since its last major round of job cuts a year ago. The shares are down 4.6% this year. The shares were up less than 1% at $44.46 at 9:32am in New York. Bloomberg