Microsoft has announced that it will be cutting 7800 jobs, primarily in its Nokia phone division.

Microsoft acquired Nokia in 2011, in an attempt to muscle in on the smartphone market. However the job cuts, combined with an announcement to write off nearly all of the value of its Nokia acquisition, signal that the company now considers the deal to have been a bad move. Microsoft may now be conceding the smartphone war to other names dominating the market, including Samsung, Google and Apple.

The anouncement comes just after CEO Satya Nadella warned that there would be “tough choices” ahead for the company, who also made 18,000 job cuts last year.

Microsoft (NASDAQ: MSFT) are trading down 0.14% today.