Microsoft's first six months under CEO Satya Nadella have been a monumental period in the company's 39-year history. The year began with the launch of the well-reviewed Surface Pro 3, its finalized acquisition of Nokia's devices business, and Nadella's well-publicized emails to his employees outlining his vision for the company.
The substantial layoffs announced on July 17th, a ruling on a court case that puts Microsoft at odds with the US government, and, on Friday, a lawsuit filed against rival Samsung have all kept Microsoft in the news during the summer months.
1. Samsung lawsuit: show Microsoft the money
Microsoft's deputy general counsel David Howard announced August 1st via a blog post on the company website that Microsoft had filed a legal action against Samsung Electronics over royalty payments.
At issue is the contract both companies entered into in 2011 that allowed South Korean smartphone maker Samsung to pay a fee to use Microsoft's IP - a contract the deputy general counsel states Samsung decided to breach shortly after Microsoft announced its acquisition of the Nokia Devices and Services business in 2013.
The AP reports that a redacted copy of the complaint filed in a New York federal court says Samsung had initially refused to issue the royalty payments owed in 2013 and eventually made a late payment in November, minus any interest due. "Microsoft and Samsung have a long history of collaboration," Howard writes. In the blog post he says he expects that partnership to continue once the courts have resolved the issue.
2. Legal wrangling part two: privacy in a global age
The action against Samsung wasn't Microsoft's only legal story in the news this week. A court ruling on Thursday was a setback for Microsoft in its bid to prevent US law enforcement from mandating the turnover of customer emails stored in its data center in Ireland.
Judge Loretta A. Preska upheld a judicial order that Microsoft surrender the emails - a ruling Microsoft had challenged, arguing that US law had no jurisdiction over Ireland. The company is planning to pursue an appeal.
At issue is "the privacy protection of individuals' email and the ability of American tech companies to sustain trust around the world," Bradford L. Smith, Microsoft's general counsel told The New York Times. The case has been of interest to many other tech firms as it's seen as a test case in the age of cloud computing when companies often store data in sites outside the US.
3. The pink slip: Microsoft acquires Nokia, announces layoffs
This court ruling mandating Microsoft turn over customer emails comes on the heels of the high-profile layoffs announced by the company via an email from CEO Nadella to his employees on July 17th - the most substantial in the company's 34-year history. Over the next year the company will lay off 4% of its workforce, cutting more than 18,000 jobs, mostly from the company's Nokia division - layoffs that were widely expected after Microsoft completed its acquisition of Nokia Devices and Services business in April of this year.
The memo, which was released publicly, states that of the 18,000 jobs lost, "Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers" with most employees being notified of their job elimination over the next six months. This move eliminates many duplicate jobs created when the acquisition was completed, but is also in line with Nadella's stated desire for a more nimble company going forward.
