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May 25, 2016

Microsoft Lays Off Nokia Employees, Exits Consumer Phone Business

by John_A

Microsoft has laid off hundreds of employees tied to its smartphone business, as the company finally exits the consumer phone market and attempts to streamline its worldwide mobile division (via The Verge).

The move will impact up to 1,850 jobs worldwide, said Microsoft’s head of Windows and devices Terry Myerson, while up to 1,350 of the positions will be in Finland. The cuts are expected to be completed by the year’s end.

The move signals the final nail in the coffin for Microsoft’s Nokia business, which the company acquired under former CEO Steve Ballmer’s management for $7.2 billion in 2014. Today’s announcement will see $950 million written off, adding to the $7.6 billion the company wrote off last year when it cut 7,800 jobs to refocus its Windows Phone plans.

Microsoft is now shorn of almost all of its 25,000 former Nokia employees, and will only retain a small number in R&D roles. Last week, the company announced it was selling off its feature phone business to FIH Mobile, a subsidiary of Foxconn, for $350 million.

All indications point to an end of Microsoft’s Lumia phones and a focus on a single Surface phone, with Myerson promising “great new devices” in an internal memo to employees, although he withheld any specific timeframe. The immediate focus for Microsoft and its new CEO, Satya Nadella, is more likely to remain on bringing the company’s software and services to iOS and Android devices, rather than risk another consumer phone failure anytime soon.

Microsoft has been scaling back its consumer phone ambitions ever since its ill-fated Nokia mobile acquisition two years ago. Nokia meanwhile has shown far loftier ambitions, last month announcing its acquisition of French health tracking company Withings for an estimated $192 million, as it seeks to expand into the consumer electronics market while maintaining its networking and commercial VR business.

Tags: Microsoft, Windows Phone, Nokia
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