Not good news for Windows Phone:

…We anticipate that these changes, in addition to other headcount alignment changes, will result in the reduction of up to 7,800 positions globally, primarily in our phone business. We expect that the reductions will take place over the next several months…

I am committed to our first-party devices including phones. However, we need to focus our phone efforts in the near term while driving reinvention. We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem that includes our first-party device family.

I interpret that as Microsoft will continue to produce a Windows Phone, at least in the near term, but that their goal is to refocus on the Windows Phone operating system and software application in order to reignite interest in the phone and “create a vibrant Windows ecosystem”.