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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  • dsraa - Thursday, May 26, 2016 - link

    This pretty sad....I see no future for WP or Lumia as a brand, and sorry to say its just plain sad. I have a lumia 640, and I don't know where I'll go after it. I don't want a flagship, and the 650 won't be offered on any major carriers like previous models were ( Lumia 1020, 930, 1520, 530, 535, etc). I know they had alot of models, but still...

    We are now down to less than %1 of the market...seriously, could you have failed any worse than Blackberry???? Really???
    Reply
  • milkod2001 - Monday, May 30, 2016 - link

    Considering how much cash has MS to make something to happen the result of less than 1% market share is EPIC FAIL. It tells you how incompetent management MS has. No matter how stupid decisions are made by few idiots,the rest of team probably just follow blindly like zombies without questioning. if something goes wrong they probably just pretend it never happened and all wait for some miracle instead of solving it :).

    Im just guessing here but i would really love to know what exactly happen to MS mobile OS division or whatever it was named. How difficult was to make sure MS mobile OS works perfectly fine on up to 10 almost the same Nokia Lumia phones? How difficult it was to make a free developing platform for developers and to pay a few grand to developers of most successful Android/iOS apps to make sure they make their apps for Windows too?

    Reply
  • pav1 - Thursday, May 26, 2016 - link

    You see, there is no accountability. Or diligence.Or innovation. Or transparency. Or apology. Their penises are all micro and soft. They shoould have been split up into separate en-tities long ago. Reply
  • Belard - Thursday, June 9, 2016 - link

    So many people lost their jobs. So much for joining the Microsoft family!

    The entire MS mobile biz has been a joke. They couldn't get anyone to really sell WP7, other than giving lots of money to Nokia. Then bought them out, then killed Nokia, but not the actual patents or important stuff. Wow. Who out there really makes a Windows Phone buy MS?

    At the AT&T stores, the Windows phones are in the BACK corner next to feature phones, old tech phones and Blackberries. With Blackberry near the front - of the back. :)

    WP7/10 UI is very good for mobile, but it never caught on. WPhone is a dead platform. I said it was dead with the failure of Windows 8 and onward.

    There is less and less reason to buy Microsoft products. Win7 and Office 2010 is the LAST things I have or will every buy that is MS.

    I totally skipped the W10 "free" upgrade scam.
    Reply
  • Belard - Thursday, June 9, 2016 - link

    (forgot to add)
    The only markets that MS/Lumina had was emerging markets like India and S.America with low-end phones. Otherwise... bleh.

    MS, Nokia, HP and RIM/Blackberry didn't see the writing on the wall and tried to go their own way rather than go Android. Blackberry is doing OKAY since they have gone Android + security.
    Reply
  • BiTesterEmailer - Thursday, July 21, 2016 - link

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  • BiTesterEmailer - Thursday, July 21, 2016 - link

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  • BiTesterEmailer - Thursday, July 21, 2016 - link

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