The company is still producing a limited line of smartphones, aimed at consumers and businesses whose employees already use Microsoft programs on their work computers.
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The restructure will cost approximately $950 million, with around $200 million expected to be dished out in the form of severance payments.
As part of the deal, FIH Mobile Ltd. will also acquire Microsoft Mobile Vietnam, the company’s Hanoi, Vietnam, manufacturing facility.
The company acquired Nokia’s phone business in 2014 for $7.3 billion, seeking to capitalize on and the fast-growing industry.
Microsoft is also in the process of selling its Nokia-branded feature phones business.
“My understanding is that Windows 10 will go on as an operating system, but there will be no more phones made by Microsoft”, said Kalle Kiili, a shop steward.
It bought Nokia’s once-dominant handset unit for about $7.2 billion, but it failed to turn the business around and a year ago announced $7.5 billion writedowns, and 7,800 job cuts.
The acquisition of Nokia’s mobile business will go down as one of the costlier missteps in Microsoft’s history.
It is thought that Microsoft’s mobile plans will now focus on enterprises, and individuals, who value device security, manageability and Continuum productivity features hihgly.
About 1,350 jobs are being cut at Microsoft’s Mobile Oy office in Finland, with the rest coming from other offices around the world.
While the software giant seems keen to exit a large portion of its phone operations, the company continues to report solid results in its cloud computing, Office 365 and Windows business units. At the Build developer’s conference, Windows Phone was virtually non-existent, and its service orientated apps (think Office 365) on Android and iOS were prominently featured.
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“These changes are incredibly hard because of the impact on good people who have contributed greatly to Microsoft”, he said. “This is why – regardless of your upgrade path – you can choose to upgrade or decline the offer”, Microsoft executive vice president Terry Myerson wrote in a blog post.
