Microsoft has announced plans to lay off up to 1,850 employees, a move that will largely impact its mobile hardware division in Finland.
The news is the latest in a long line of setbacks to emerge from Microsoft’s doomed $8 billion Nokia acquisition. Three months after the deal was closed back in April 2014, Microsoft CEO Satya Nadella revealed that the company would be cutting up to 18,000 jobs, almost three-quarters of which belonged to former Nokia staff. A year later, in July 2015, Microsoft announced a major restructuring plan for its mobile business, with up to 7,800 job cuts. This happened as it was also writing off the $7.6 billion it paid to acquire Nokia’s phone division.
Last week, Microsoft announced plans to offload its feature-phone business — to FIH Mobile, a subsidiary of Taiwan-based electronics giant Foxconn, along with another entity, called “HMD Global, Oy” — for $350 million. The company revealed that 4,500 employees would “have the opportunity” to join one of the two firms — a move that also heralded the return of Nokia to the mobile phone hardware realm.
Microsoft hasn’t entirely pulled the plug on its mobile phone business — it recently confirmed it will continue working on Lumia-branded phones, and it is also rumored to be working on its own Surface Phone under the stewardship of Nadella. But the company has announced its mission to “reinvent productivity and business processes, build the intelligent cloud platform, and create more personal computing.”
“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 Nadella in a statement today. “We will continue to innovate across devices and on our cloud services across all mobile platforms.”
Of the “up to” 1,850 jobs that will go, Microsoft said that around 1,350 of them will be from Microsoft Mobile Oy in Finland, in addition to some 500 roles around the world. As a result of these layoffs, Microsoft said it will “record an impairment and restructuring charge” of around $950 million, $200 million of which will go toward severance pay. The company anticipates that most of these redundancies will be resolved by the end of 2016, with the full and final toll to be realized by July 2017.