Microsoft plans to cut as many as 7,800 jobs and write down about $US7.6 billion on its Nokia phone-handset unit, wiping out nearly the entire value of a business that failed to gain market share since it was acquired last year.

The company also will record a restructuring charge of about $US750 million to $US850 million for the reorganisation 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. Nadella had hinted at job cuts in a 1,500-word email to staff last week, saying 'tough choices' would have to be made.

'Tough choices have to be made': Buried deep in Microsoft chief executive Satya Nadella's 1,500-word email to staff last week was a warning. Credit:Reuters

Nadella is scaling back its mobile ambitions, seeking to tailor Windows devices for a narrower set of customers, instead of trying to sell as many mobile phones as possible in a market dominated by Apple and Google.

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.