Microsoft layoffs puts in question company’s mobile future

Microsoft Corp. announced it would be “streamlining” its mobile hardware business, taking a significant write-down of approximately US$950 million and eliminating up to 1,850 jobs, 1,350 of them at its Finland-based Microsoft Mobile Oy division.

The move effectively shuts down what remained of Finnish tech giant Nokia’s former mobile division, which Microsoft purchased in 2014 for US$7.2 billion.

In a statement, Microsoft CEO Satya Nadella said that while the company remains committed to mobile platforms, it would be focusing its future efforts on the enterprise market, where Nadella said Windows 10’s adaptive Continuum feature, as well as Microsoft’s focus on security, would find a more receptive audience.

In an internal memo published on Recode, Microsoft’s Windows and Devices head Terry Myerson said the company would continue to support its current line of Lumia and OEM partner devices.

From nearly the beginning, Microsoft’s acquisition of Nokia’s mobile division was a bloody one: Less than three months after the Redmond, Wash.-based tech giant’s initial purchase, 12,500 employees – a full 50 per cent of the 25,000 who had transferred from Nokia to Microsoft – were let go. The next round of job cuts came last year, when Microsoft announced an additional 7,800 staff cuts and took a US$7.6 billion write-down on the acquisition.

Microsoft’s latest announcement comes a week after the company revealed it would be selling its entry-level phone assets to Taiwan-based Foxconn Technology Group and the newly-formed HMD Global Oy, led by former Nokia and Microsoft Mobile employee Arto Nummela, for $350 million.

Nokia, meanwhile, appears to be re-entering the smartphone market it abandoned two years ago: last week the company signed a 10-year licensing agreement that will see the Helsinki, Finland-based HMD manufacturing a new line of Nokia-branded mobile phones and tablets.

As for details about Microsoft’s future in the mobile arena, the company says it will provide more information during its fourth-quarter earnings announcement on July 19, noting that it expects to complete the majority of the cuts announced today by the end of the calendar year, and will have finished the rest by July 2017.

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Eric Emin Wood
Eric Emin Wood
Former IT World Canada associate editor turned consultant with public relations firm Porter Novelli. When not writing for the tech industry enjoys photography, movies, travelling, the Oxford comma, and will talk your ear off about animation if you give him an opening.

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