The company said Wednesday that it will ax as many as 1,850 jobs, many of them in Finland – home base of the handset business Microsoft acquired two years ago from Nokia Oyj.
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Microsoft said it would “streamline” its smartphone business and close down its research and development site in Tampere, Finland.
Microsoft CEO Satya Nadella said in a statement that Microsoft will be “focusing our phone efforts where we have differentiation”.
Although Microsoft doesn’t specifically acknowledge a Surface Phone, it confirms that new hardware would see daylight while at the same time supporting the rest of the ecosystem should partners continues to build devices running Windows 10 Mobile. This happened as it was also writing off the $7.6 billion it paid to acquire Nokia’s phone division.
In 2013 Ballmer’s last major act was a deal to buy Nokia, who was then struggling but earlier had a dominant handset business, for about $7.2 billion.
As a result of this, the Redmond-headquartered company will record an impairment and restructuring charge of approximately $950 million, of which approximately $200 million will relate to severance payments.
Employees working for Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, are not in scope for the planned reductions, Microsoft said in a statement.
The additional cost makes what has been the largest write-off in Microsoft’s 41-year history even bigger.
For more on today’s Microsoft announcements and what it means for the company, check out this CNET story.
John Delaney, associate vice president for mobility at IDC Europe, for one thinks that Microsoft has made the right move with these latest steps by ending its efforts at the consumer smartphone market and going full bore after enterprise customers.
According to Kantar Worldpanel, Windows accounts for 6.2 percent of the United Kingdom smartphone market and 4.9 percent of sales in Europe’s five biggest countries. Last year, another 7800 jobs. For its part, Nokia plans to bring branded Android phones back via the companies that just bought those assets from Microsoft.
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Microsoft won’t be turning away from phones completely, though.
