Microsoft CEO Satya Nadella signals changes in memo to employees

Microsoft CEO Satya Nadella postponed any comment on broadly probable job cuts at the software company, after circulating a memo to employees gifted to "flatten the organization and build up leaner business processes."
Nadella said he would address thorough directorial and economic issues for the company's new financial year, which ongoing at the opening of this month, when Microsoft news magazine wages on July 22.
"There will be many opportunities for me to talk more about our specific financial plans on the 22nd," Nadella said in a telephone conference.
Since engrossing the handset business of Nokia this spiral, Microsoft has 127,000 employees, far more than rivals Apple Inc and Google Inc.
Wall Street is having a baby Nadella to make some cuts, which would symbolize Microsoft's first major layoffs since 2009.
"With recent babble on on the Street about probable head count reductions at Microsoft it was important for Nadella to be noticeable and set an positive tone heading into the next few months, in particular on the heels of the Nokia mixing," said Daniel Ives, an psychiatrist at FBR Capital Markets.
In a 3,105-word memo sent to employees on Friday and posted on Microsoft's website, Nadella set out his vision for the company five months after taking over as CEO from Steve Ballmer.
Most clearly he described Microsoft as a "efficiency and stand company" paying attention on mobile and cloud computing, a frail advance on Ballmer's reinvention of Microsoft as a "devices and services" company, which could signal less emphasis on developed plans.

HTC says it may consider buying Nokia’s Chennai plant as Microsoft deal nears completion

NOKIA

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22 Apr 2014 , 12:55

Nokia said on Monday that it expects the EUR 5.44 billion deal with Microsoft for sale of its Devices & Services to conclude on April 25 and expressed the hope it would continue to operate the disputed Chennai plant under a service agreement.

“Nokia today announced that it expects the transaction whereby the company will sell substantially all of its Devices & Services business to Microsoft to close on April 25, 2014. The transaction is now subject only to certain customary closing conditions,” Nokia said in a statement.

'Nokia will have to clear Rs 6,500 cr tax liability'

A top finance ministry official has asserted that Nokia will have to clear a total tax liability estimated around Rs 6,500 crore. "Nokia will have to pay total tax liability," the senior official said when asked to respond to the recent statement of Finland's Foreign Minister Erkki Tuomioja. Finland's foreign minister Erkki Tuomioja said last week that failure to resolve the case before December 12 could lead to closing down of the Chennai plant . "There is an agreement between Nokia and Microsoft that unless this dispute is solved and the assets of its Chennai plant unfreezed before December 12, the Chennai plant would be left outside of Nokia-Microsoft agreement. "That of course, in the worst case, could lead to closing down of the Chennai plant, which is employing many thousand people, and with sub contractors up to 30,000 people. So, I think that would not be (in) anyone's interest," he had said. The Income Tax Department had slapped a notice on Nokia's Indian subsidiary for violating withholding tax norms since 2006 while making royalty payments to its parent company in Finland. Nokia had moved the Delhi High Court seeking lifting of stay on transfer of its assets here and offered to pay a minimum deposit of Rs 2,250 crore as tax, contending that the injunction will jeopardise the sale of its Indian arm to US-based tech giant Microsoft under the global deal. The I-T Department this week told the Delhi High Court that the offer of Nokia to pay a minimum deposit of Rs 2,250 crore to it, out of the company's total tax liability of nearly Rs 6,500 crore, is not acceptable. Nokia India, however, had stuck to its offer and said it is for the department to decide if they are better off with the proposed amount or without it. The matter has been listed for December 9 when Nokia has to give details of its assets and liabilities as well as how much tax it has paid here. Nokia's Chennai plant is one of its biggest facilities. It may be excluded from the $7.2 billion agreement between Nokia and Microsoft if the company's assets are not released by December 12.

Nokia hands over headquarters to Microsoft

 
Helsinki: Finnish telecom equipment maker Nokia said on Thursday it would hand over its headquarters outside Helsinki to US software giant Microsoft, which has acquired the group`s mobile business.

The building is located in Espoo, a suburb of the capital.

According to Nokia, most of the staff in the building work for the mobile division, which explains why it will house the Microsoft offices after the transaction is completed.

The employees who remain at Nokia, now focused on the telecom business, will be transferred to other buildings in Espoo.

Nokia`s headquarters, a symbol of Finnish economic success in the 1990s and 2000s, will now also be a reminder of the fall of what was once the world`s biggest mobile phone maker.

Dubbed the "Nokia House", the building was built by the Baltic Sea in the 1990s, at a time when the booming mobile phone market seemed to grant the company a promising future.

In December last year, loss-making Nokia sold it to a real estate company, but agreed to lease it back on a long-term basis.

On Tuesday, Nokia`s shareholders approved the sale of the mobile phone business to Microsoft for 5.44 billion euro (USD 7.30 billion), hoping that the deal will get the company back on the profit track.

Nokia shareholders expected to approve Microsoft deal

Nokia shareholders are expected to approve the sale of its mobile phone business to Microsoft on Tuesday, with the deal's financial benefits likely to outweigh resistance from a minority of investors upset over the sale of a Finnish national icon.

Nokia agreed in September to sell its devices and services business and license its patents to Microsoft for 5.44 billion euros after failing to recover from a late start in smartphones.

The sale, which is expected to close in the first quarter of next year after regulatory approvals, is set to boost Nokia's net cash position to nearly 8 billion euros from around 2 billion in the third quarter and allow it to return cash to shareholders, possibly through a special dividend.

Without the loss-making handset business, the remaining company will earn over 90 percent of sales from telecom equipment unit Nokia Services and Networks (NSN) and will also include a navigation software business and a trove of patents.

Since the Microsoft deal was announced, Nokia shares have doubled, closing at 6.00 euros on Monday.

Last year, they fell as far as 1.33 euros, a level not seen since 1994, on worries the mobile phone business would burn through cash before it could ever catch up with rivals such as Samsung Electronics (005930.KS) and Apple Inc (AAPL.O).

Billionaire and activist investor Daniel Loeb said in October that he had taken a position in Nokia and that he expects a "meaningful portion of the excess" cash from the Microsoft deal to be returned to investors.

While approval from shareholders is considered a done deal, Tuesday's meeting, which starts at 2:00 p.m. (1200 GMT) in Helsinki's Ice Hall arena, will also be a chance for some shareholders to vent their dissatisfaction.

The sale of the mobile phones business, Finland's biggest brand and at one point worth 4 percent of national GDP, came as a shock to many Finns. The company's success helped to transform Finland from a backwater economy in the shadow of the Soviet Union into a high-tech powerhouse.

At Nokia's last regular shareholders' meeting, many shareholders took to the microphone to question CEO Stephen Elop's strategy, particularly his 2011 decision to adopt Microsoft's Windows Phone software over Nokia's own Symbian or Google's (GOOG.O) widely popular Android operating system.

Elop stepped down when he announced the agreement with Microsoft, his former employer, and is due to return to the Redmond, Washington company when the deal closes.

Finnish tabloids have called him a "Trojan horse", although most analysts have been sympathetic, saying there were few good options for the company by the time he was hired in late 2010.

One Finnish businessman and former Nokia manager had set up a group called Nokita, translated as "bet higher" in Finnish, in an attempt to outbid Microsoft. He said on Monday that he failed to find enough investors.

"Of course there was a bit of a patriotic idea behind my plan, but there was also the calculation," said Juhani Parda, who believed Nokia's devices business could be worth around 23 billion euros in three years by adopting Android in addition to Windows Phone. "I think 5.44 billion is definitely good for Microsoft. I'm not sure it's the best deal for shareholders."

Microsoft beats forecasts as Q1 profit jumps 17 per cent

 
Microsoft Corp cruised past Wall Street's quarterly profit and revenue forecasts, helped by strong sales of its Office and server software to businesses, sending its shares up 6 per cent after hours.

For the first quarter, the technology giant posted a 17 per cent increase in profit to $5.2 billion, or 62 cents per share, up from $4.5 billion, or 53 cents per share, in the year-ago quarter.

Revenue rose 16 per cent to $18.5 billion, helped by rising sales of its Office software.

Analysts had trimmed profit estimates for Microsoft over the past three months, concerned by the launch of an ambitious reorganisation by retiring Chief Executive Steve Ballmer and the pricey acquisition of Nokia's handset business, even as the company's core personal computer market ebbs away.

"The earnings report will positively surprise the market, especially in the context of the soft expectations going in and the dismal report last quarter," said Todd Lowenstein, a portfolio manager at fund firm HighMark Capital. "Beating on revenue and earnings handily will boost confidence that the reorganization is pivoting them in the right direction."

Technology is proving one of the most resilient sectors in an uncertain US economy, with 84 per cent of tech companies beating analysts' earnings estimates for the latest quarter.

Microsoft, the world's largest software company, is the latest tech firm to surprise investors with a powerful performance, coming the same day as Amazon.com Inc eased past average revenue forecasts.

As part of its reinvention as a "devices and services" company, Microsoft now reports under two main groups - one covering its devices and consumer business, and one its commercial business.

The commercial side was the stronger in the quarter, posting a 10 per cent increase in revenue, chiefly from selling Office and server software to businesses. The consumer and hardware group's revenue rose a more modest 4 per cent, held back by another poor quarter for the Windows system as sales of personal computers continue to decline.

According to industry research firm Gartner, PC shipments fell 8.6 per cent last quarter, confirming a worldwide trend towards tablets that has benefited Apple Inc and Google Inc but hurt traditional PC stalwarts Microsoft and Intel Corp.

PC sales have been sliding for the last 18 months, although Microsoft Chief Financial Officer Amy Hood said on Thursday that there were "signs of stabilisation".

Microsoft said nothing on Thursday about the board's search for a new CEO after Ballmer announced in August that he plans to retire within 12 months.

Its shares rose to $35.65 after hours, after closing at $33.72 on Nasdaq.