Wednesday, May 25, 2016
Microsoft slashes nearly 2,000 jobs as its smartphone business crumbles
Microsoft is taking an ax to its smartphone business.
The American tech company is cutting nearly 2,000 jobs, it announced Wednesday, including 1,350 from Finland as it ceases phone design and production in the country.
The Finland layoffs were reported earlier by the Finnish press. After years of partnership, Microsoft acquired Nokia's smartphone business in 2014, giving it a presence in the country. Steve Ballmer, then Microsoft's CEO, said before the acquisition that Finland would become the "hub and the centre for our phone R&D."
But Microsoft's phone business has struggled to eat into the market share of the major players Google and Apple, and Microsoft has since moved away from the Nokia brand, selling off its featurephone business earlier this month.
According to research from Gartner, Microsoft now accounts for less than 1% of the global smartphone business, down markedly on last year.
Microsoft executive Terry Myerson informed employees of the layoffs in an email seen by The New York Times, saying the company needed "to be more focused in our phone hardware efforts." There will be up to 1,850 layoffs in total.
In a statement, CEO Satya Nadella said: "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 ... We will continue to innovate across devices and on our cloud services across all mobile platforms."
As The Times, points out, this is just the latest in a line of cuts targeting the company's smartphone business. Microsoft laid off 18,000 people in 2014, followed by another 7,800 last year.