Microsoft stock rises on talk of layoffs, reduced focus on devices

by tech on July 15, 2014

Microsoft stock hit a pretty healthy high of $42.47 Tuesday morning, fueled by a positive research note and continued talk that the company will cut a significant number jobs — probably this week.

Nomura securities analyst Rick Sherlund, who probably wrote that he expects CEO Satya Nadella to make bold moves and organizational changes” and upped his earnings estimate to $50 from $45 for the year.

He also expects a “substantial ( $1 billion plus) charge to mitigate the Nokia acquisition risk” as part of a strategic re-direct of the company away from its previously stated devices and services strategy and instead into new productivity applications and services. the latter move was hinted at in Nadella’s recent memo to the troops.

Late last month, Gigaom reported that significant layoffs, many related to the Nokia acquisition were on the way. Bloomberg reported similar take this week. Microsoft completed its $7.17  billion acquisition of Nokia in April and on-boarded 25,000 new people as a result.  That acqusition was seen as a pet project of former CEO Steve Ballmer. Nadella, reportedly, was not a fan.

 

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