Following the job cut, Nadella sent an internal e-mail to its employees saying “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”.

As it stands Microsoft doesn’t have many big hitters producing Windows Phones (90% of Windows Phones are Lumias), and it would be hard to see Microsoft doing anything other than gradually calling it a day in this department. The mobile sector will bear the brunt of the layoffs that comes a year after 18,000 jobs were cut due to a restructuring.

However, Bloomberg’s sources claim that Microsoft expects to manufacture its own smartphones for at least another two years.

Ever since the influx of smartphones from major brands like Apple, Google and Samsung, Microsoft Corp. has tried to break into the market by replacing several executives, retooling its software, and spending billions of dollars to get its hand on a hardware business, the Wall Street Journal noted.

Last month, the company had announced that Stephen Elop, the former top boss at Nokia, would leave.

That reorganization aimed to drive engineering alignment against the company’s core ambitions: reinventing productivity and business processes; building the intelligent cloud platform; and creating more personal computing.

Microsoft said it will give more details when it reports fourth-quarter earnings on July 21.

To align them better with the priorities of the company that includes the changes in the trend to the company’s engineering teams as well the leadership of the enterprise, Microsoft has been making changes everywhere.

But Microsoft’s Windows Phone system has gained little traction against Apple’s iPhone and Google’s Android system.

The reduction in the employees will primarily be made in the phone industry.

At least for right now, Microsoft is continuing to push Windows as a smartphone OS, thanks to its development of Windows 10 Mobile. Even in the United Kingdom, which is one of Windows Phone better markets, there has been decline over the last couple of years. However, on Wednesday, Satya Nadella, the company’s existing CEO wanted to depart that deal.