Microsoft Shutters Last Big Part of Purchase of Nokia
Microsoft will close the last big piece of its phone hardware business acquired from Nokia, ending a saga of two years that saw the business stumble badly in its attempt at challenging rivals in Silicon Valley in the business of smartphones.
The most recent fallout was announced on Wednesday with as many as 1,850 job cuts and a restructuring charge of $950 million, of which $200 million is related to severance pay for employees.
Since the purchase by Microsoft of Nokia’s handset business during April of 2014, the company has laid off a total of tens of thousands at research and manufacturing facilities from its headquarters in Redmond, Washington to China and Finland.
The financial losses of the company, including the poor bet it took on Nokia’s brand name, cost of shuttering facilities, cutting personnel and customer relationships totals over $10 billion in write downs and charges.
There is very little to show for all the trouble it has had the past two years. Windows software ran only 0.7% of all smartphones that were sold in the first quarter of 2016.
The Android operating system, controlled by Google, ran over 84% of all smartphones sold in the same period and the iOS by Apple powered over 15%.
The largest number of job cuts, or approximately 1,350, will hit the Finland offices of Mobile Oy, the core of the business that Microsoft spent over $7 billion in 2014 to acquire.
The other 500 or more job cuts will be across regions and product groups, said a spokesperson for Microsoft.
No explanation was given about any possible layoffs or if any would be at its headquarters in Washington state.
Microsoft last week sold its feature phone business that it purchased from Nokia to hardware maker in Taiwan and Apple assembler Foxconn and a firm backed by a private equity company that is leasing the brand name Nokia.
Combined with the cuts announced Wednesday, the only piece of Nokia that Microsoft will continue operating is a Finland based R&D facility.
The existing software on smartphones of Microsoft will be supported by the company including the mobile variant of Windows 10, a memo to employees said.