There had been rumors swirling of impending layoffs, but Microsoft Corporation (NASDAQ:MSFT)’s announcement that it would cut 18,000 positions was bigger than anyone expected. That’s 12,500 positions related to Microsoft’s acquisition of Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) earlier this year, and another 5,500 from various underperforming segments such as Xbox Studio. But if the goal is to reallocate cash to its most productive businesses, Forbes contributor Peter Cohan argues that it should just cut its losses and sell Nokia to Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) or another interested buyer.

Satya Nadella Microsoft

Cohan wants to see a greater emphasis on cloud and enterprise services

“While this move and the layoffs will free up capital for other uses, the question that Nadella must answer is where to invest Microsoft’s capital and talent in order to accelerate growth,” writes Cohan. “Microsoft should consider selling Nokia to Lenovo — as Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) did with Motorola Solutions Inc (NYSE:MSI) in January for about $2.9 billion (taking a 77% haircut on its 2012 buy).”

Cohan’s basic argument is that the Windows Phone is an also-ran in the mobile market behind Apple Inc. (NASDAQ:AAPL)’s iPhone and Samsung Electronics Co. Ltd. (LON:BC94) (KRX:0059935)’s Galaxy line, and that it won’t be able to increase its market share much beyond its current 3%. The capital that it saves can be used to work on enterprise services, which Grandmaster Capital LLC founder Patrick Wolff also recently cited as the company’s biggest strength.

Microsoft’s Nadella won’t reverse course after just a couple of months

Right off the bat, there’s no reason to assume that Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) is terribly interested in buying Nokia. It bought Motorola from Google Inc (NASDAQ:GOOG) to jumpstart its entry to US markets, and probably doesn’t need to pull the same maneuver twice. But even if we just take Lenovo as a stand-in for some interested buyer, Microsoft Corporation (NASDAQ:MSFT) finalized the Nokia deal in April well after Nadella had taken the reins from former Microsoft CEO Steve Ballmer. He’s not going to change his mind less than three months later, let alone at fire sale prices.

But even if the sale of Nokia isn’t in the cards, Nadella has proven that he’s willing to make drastic changes to improve Microsoft Corporation’s (NASDAQ:MSFT) profitability, which goes some way to justifying the stock’s 25% rise since he took the helm.