XAT 2021 — VARC Question 15

Read the following excerpt and answer the two questions that follow.
Para 1: We plan to right-size our manufacturing operations to align to the new strategy and take advantage of integration opportunities. We expect to focus phone production mainly in Hanoi, with some production to continue in Beijing and Dongguan. We plan to shift other Microsoft manufacturing and repair operations to Manaus and Reynosa respectively, and start a phased exit from Komaron, Hungary.
Para 2: In short, we will focus on driving Lumia volume in the areas where we are already successful today in order to make the market for Windows Phone. With more speed, we will build on our success in the affordable smart phone space with new products offering more differentiation. We’ll focus on acquiring new customers in the markets where Microsoft’s services and products are most concentrated. And, we will continue building momentum around applications.
Para 3: We plan that this would result in an estimated reduction of 12500 factory direct and professional employees over the next year. These decisions are difficult for the team, and we plan to support departing team members with severance benefits.