Microsoft cutting up to 7,800 jobs

Brett Molina | USA TODAY

Show Caption Hide Caption Microsoft to Eliminate 7,800 Jobs Bloomberg's Vonnie Quinn reports on job cuts at Microsoft. She speaks on Bloomberg Television's "Market Makers."

One year after announcing a massive round of job cuts impacting 18,000 employees, Microsoft is wielding the ax again.

In a statement Wednesday, Microsoft said it will slash up to 7,800 additional jobs. 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 Wednesday. "In the near-term, we'll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."

Shares of Microsoft are up more than 1% at $44.73 in morning trading.

Details of the job cuts were first reported by The New York Times.

The cuts and charges will be complete by the end of Microsoft's fiscal year, the company said.

The job cuts are tied to Microsoft's big gamble to become a larger player in the smartphone market. Last year, it completed its acquisition of Nokia's handset business after partnering on the Lumia line of smartphones running Microsoft's Windows Phone operating system.

Microsoft's deal to acquire Nokia's handset business in 2013 — one of the last acts of outgoing CEO Steve Ballmer — has been a "head-scratcher" from the beginning, says FBR Capital Markets analyst Daniel Ives.

"Nadella inherited this headache," Ives says. "This is Nadella, after a year and a half, (trying) to cut the cord as much as possible to the Nokia business."

It's also the latest move by Nadella to shift the company's focus toward key businesses, including cloud computing, Microsoft's Office software suite and Windows 10. "They're going through a major sea change at Microsoft in terms of restructuring and strategic focus," Ives says.

Mobile remains a core part of Microsoft's strategy, but Ives notes the company will focus more on "the software piece around mobile rather than dedicating resources and employees toward hardware," such as its line of Windows phones.

Last year, Nadella revealed the company was cutting up to 18,000 jobs as part of a larger plan to streamline the organization.

"My promise to you is that we will go through this process in the most thoughtful and transparent way possible," Nadella said in a memo to employees when the layoffs were announced.

The additional cuts arrive as Microsoft prepares for one of its biggest product launches in recent years: Windows 10. The operating system that will work across PCs and mobile devices launches later this month.

"Windows 10 may be Microsoft's first real chance at growth in many years," tech analyst Jeff Kagan says. "It will also work with mobile and will be very interested to see if they can pull all the pieces together going forward."

Follow Brett Molina on Twitter: @brettmolina23.