Microsoft on Wednesday announced another reorganization of its smartphone business with plans to streamline operations and eliminate redundant personnel. The company will lay off 1850 of its employees in Finland and other countries and will take a $950 million charge. The actions seem to be in line with Microsoft’s plans to focus on development of flagship smartphones and leave the market of mass handsets.

When Microsoft closed its acquisition of Nokia in late April, 2014, it received approximately 25,000 new employees from around the world, who were involved into development, production, sales, and distribution of smartphones and feature phones. Shortly after, in July, 2014, Microsoft laid off 12,500 former Nokia staff as a part of its major reorganization, when it let go 18,000 Microsoft employees in total. The first wave of dismissals eradicated numerous positions at Nokia and shut down the division, which developed software for feature phones, leading to eventual elimination of Asha devices from Microsoft’s lineup.

A year after the company announced the first phase of streamlining, the software giant revealed further plans for phone business restructuring. In July, 2015, Microsoft decided take an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services business, and take a restructuring charge of approximately $750 million to $850 million. As part of its second phase of optimizations, the company laid off another 7,800 former Nokia employees globally. Besides, Microsoft announced their intentions to focus on flagship smartphones and generally to phase out inexpensive handsets going forward.

Today’s announcement further eliminates 1350 jobs in Finland as well as 500 additional jobs globally. The actions are to be fully completed by July, 2017, and will cost Microsoft approximately $200 million related to severance payments. Microsoft further noted that sales teams based in Espoo, Finland, will not be affected by the layoffs.

As a result of its optimizations of the handset business, by mid-2017 Microsoft will have eliminated approximately 21,650 former Nokia employees out of the iniitlal ~25,000 who joined Microsoft in 2014. Moreover, as 4,500 former Nokia staff are set to join FIH Mobile or HMD Global in the coming months, it means that by mid-2017 the absolute majority of the former Nokia employees will be gone from Microsoft.

Microsoft did not reveal any new plans concerning its smartphones going forward, but repeated what it said in 2015: the company will concentrate on flagship models and will support its traditional hardware partners with development of their smartphones featuring Windows 10 Mobile. The software giant sees security, manageability and Continuum feature as its key strengths on the smartphone market going forward, which essentially indicates that the company sees enterprises as the main customers for its handsets. Microsoft did not mention its PureView camera and other consumer focused assets it got from Nokia as its unique advantages to address consumers, which may indicate that the company no longer considers consumers as its main customers in the smartphone world.

“We are focusing our phone efforts where we have differentiation — with enterprises that value security, manageability and our Continuum capability, and consumers who value the same,” said Satya Nadella, chief executive officer of Microsoft. “We will continue to innovate across devices and on our cloud services across all mobile platforms.”

What the head of Microsoft did mention is that the company will continue to offer cloud-based services to all mobile platforms. Again, this is not something new as it emphasizes Satya Nadella’s cloud approach to mobile and his reluctance to fight against Apple, Google and Samsung in the world of mobile platforms and mobile hardware.

Source: Microsoft

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  • JoeMonco - Thursday, May 26, 2016 - link

    OS X doesn't use the OpenBSD kernel. Whereever did you hear such nonsense? Reply
  • osxandwindows - Friday, May 27, 2016 - link

    I think what he meant was that os X used part of the BSD code for darwin/xnu. Reply
  • BrokenCrayons - Thursday, May 26, 2016 - link

    I think because Microsoft recently, very explicitly portrayed Google in a negative light during a televised advertising run over the data mining and then turned full about on doing so themselves, it's left some consumers with a bit of animosity. It's also probably not sensible to excuse Microsoft of taking the same low road as Google and Apple just because "everyone else is doing it." That's a bandwagon approach to rummaging through your personal information for valuables and for many of us, its unacceptable. Some of the more outspoken proponents of data privacy do their utmost to evade mining efforts by using operating systems and software that don't do so (Linux), avoiding known services that collect data (Facebook, Twitter, etc), and rummaging through obscure privacy settings to disable data collection anyplace possible. A few of us have even given up smartphones partly because, despite offering a few interesting capabilities, they're essentially a pocket-portable lens into where you are, what you're doing, and who you're interacting with down to the keystroke level. Reply
  • BurntMyBacon - Thursday, May 26, 2016 - link

    @BrokenCrayons: "I think because Microsoft recently, very explicitly portrayed Google in a negative light during a televised advertising run over the data mining and then turned full about on doing so themselves, it's left some consumers with a bit of animosity."

    You're probably right, but if that's the reason you(the consumer) drop the platform, you should at least make sure the platform you switch to (or are currently using) isn't doing the same or worse.

    @BrokenCrayons: "It's also probably not sensible to excuse Microsoft of taking the same low road as Google and Apple just because "everyone else is doing it." "

    ---------------------------RANT WARNING---------------------------
    Fully agree here. When did trying to be better than the competition become a bad thing. I'm not going to move to a worse platform just to spite Microsoft, but I'm also not going to pretend like the loss of privacy, expansive data mining, and advertisements directly in the OS are a good thing either. Don't try to tell me that they are necessary evils either, how many decades has Microsoft prospered without using such things. The times are changing is also a cheap cop out. Of course times are changing. By definition times are always changing. It's up to you and me to make sure that they are changing for the better and not the worse. Sorry, got a little worked up. I digress.
    Reply
  • inighthawki - Friday, May 27, 2016 - link

    >> The times are changing is also a cheap cop out.

    To be fair, we now live in an internet connected world where people value connected/live services. Generally improving the quality of such services requires knowing what your target audience wants to actually do with them.

    Plus a lot of the type of telemetry that microsoft is collecting in windows 10 is stuff they've collected before, but just never told you about. Like did you know that in Windows 7 it records every time you open the start menu and reports back to microsoft what you actually did in it? Did you immediately close it? Launch a recent app? Open my computer? Yes, they know.
    Reply
  • damianrobertjones - Thursday, May 26, 2016 - link

    It's not like you cannot just use your hosts file or any number of options to disable the stuff. WHat other choice do you have other than Apple or Google? Both of them have other issues. Reply
  • inighthawki - Wednesday, May 25, 2016 - link

    "They are doing with Windows 10 Mobile the same as the always to with gaming."

    I'm not following... To what specifically are you referring to with respect to gaming?
    Reply
  • QinX - Wednesday, May 25, 2016 - link

    With every new OS release, they state, we care about gamers! and proceed to do all sorts of stuff that shows they absolutely don't care about gamers.

    examples: No DX12 on Windows 8.1, trying to push UWP/windows store games with broken/lacking features.
    Other notable examples from the past.
    Games for Windows Live
    refusing to bring console exclusives to PC, even if they might be 1 year later for extra cash grabbing.

    The same is visible with their mobile division. First they buy Nokia and announce:"We will continue supporting all mobile segments" and now they cancel one thing after another: still awfull app support, the said they'd solve it with converter apps, 1 got canceled and they other you never hear of.

    My friend keeps saying they are still going to do it, but I've given up. When my Lumia 1020 finally dies I'm going to go back to Apple. (Iphone 4 -> Lumia 1020 -> Iphone 7/7s)
    Reply
  • inighthawki - Wednesday, May 25, 2016 - link

    >> No DX12 on Windows 8.1

    DX12 depends on numerous kernel-level changes in the WDDM 2.0 driver model that is not easily backported to older OSs. Given that Windows 10 is a free upgrade all the way back to Windows 7, I don't particularly see this as an issue since they've offered it to you for free and you willingly chose to not accept it.

    >> trying to push UWP/windows store games with broken/lacking features.

    There are only two lacking features: Overlay support (e.g. steam overlay) in UWP and no real ability to disable vsync. The former is a valid complaint, and they mentioned they're working on resolving this. The latter has actually already been backported to the November release.

    http://www.windowscentral.com/microsoft-unlocks-fr...
    https://msdn.microsoft.com/en-us/library/windows/d...

    DXGI_SWAP_CHAIN_FLAG_ALLOW_TEARING

    Tearing support is a requirement to enable displays that support variable refresh rates to function properly when the application presents a swap chain tied to a full screen borderless window. Win32 apps can already achieve tearing in fullscreen exclusive mode by calling SetFullscreenState(TRUE), but the recommended approach for Win32 developers is to use this tearing flag instead.

    To check for hardware support of this feature, refer to IDXGIFactory5::CheckFeatureSupport. For usage information refer to IDXGISwapChain::Present and the DXGI_PRESENT flags.
    ---

    The lack of crossfire/SLI support is commonly misattributed to an issue with UWP, but is in fact a combination of driver limitations and the games actually just not actually supporting it.

    >> Games for Windows Live
    Fair enough :)

    >> refusing to bring console exclusives to PC, even if they might be 1 year later for extra cash grabbing.
    They've slowly been doing this, though. Also a lot of console game engines are built and extremely highly optimized for consoles and it's actually a much larger pain than you think to port the game over to PC and actually work well. there's a reason why most studio contract out their ports to other studios.

    As someone who does a lot of work in graphics and likes to write game in his spare time, I've found Microsoft's commitment to their games and graphics divisions to be absolutely top notch. Their tools are lightyears ahead of the competition and IMO the D3D API is much more pleasant to use than OpenGL and Vulkan. Some will disagree, but I stand by that claim.

    I certainly agree that Microsoft's mobile game is lacking, but I would not in any way compare it to their games division which is, from everything I can see, exceptionally successful.
    Reply
  • BurntMyBacon - Thursday, May 26, 2016 - link

    @inighthawki: "DX12 depends on numerous kernel-level changes in the WDDM 2.0 driver model that is not easily backported to older OSs."

    True. Though, its Microsoft's fault that this is misunderstood. They've used DX to drive sales of a new OS before. Also, their nearest competitor Vulkan is putting out the effort to work with previous versions of windows. I give Microsoft only a little sympathy in this situation.
    Reply

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