After acquiring Nokia’s phone business for $7.2 billion two years ago, Microsoft wrote off $7.6 billion last year and cut 7,800 jobs to refocus its phone efforts.
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The number of employees who still work on smartphones in the group as whole was not been mentioned by it. It says that even with the selling of its feature phone business it will still “continue to develop Windows 10 Mobile” and give support to a range of Lumia phones and other phones from OEM partners.
Nadella has already written off most of the US$9.5 billion Nokia deal led by former Microsoft CEO Steve Ballmer, shifting its Windows phone strategy toward business customers as it struggles to compete with Apple Inc and vendors using the Android operating system.
This move follows the sale last week by Microsoft of its Nokia feature phone business to FIH Mobile and HMD Global for $350 million. The job cuts will largely be at Microsoft Mobile in Finland, where 1,350 people are expected to lose their jobs.
Microsoft CEO Satya Nadella said the company will focus on areas where it has “differentiation”, but he didn’t go into specifics.
He further said: “We will continue to innovate across devices and on our cloud services across all mobile platforms”. With the latest announcement from Microsoft, the company’s smartphone hardware arm is finally wiped out. Most of the cuts will take effect by the end of this year with full completion of the restructure set for July 2017.
As a result, Nokia and Microsoft have slashed thousands of Finnish jobs over the past decade, and the lack of substitute jobs is the main reason for the country’s current economic stagnation.
Microsoft’s smartphone business looks like it’s hit the final nail in Nokia’s coffin, with the tech behemoth cutting down over 1850 jobs.
The majority of the layoffs – approximately 1,300 – will affect workers at Microsoft Mobile Oy in Finland. Last year, another 7800 jobs.
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It’s been widely speculated Microsoft could build on the success of its convertible Surface tablets and leverage that product line to create a high-end Surface phone in the next year. Focusing on higher end devices and potentially bridging Windows 10 to more devices is the way to go.
