The future does not look bright for Microsoft’s smartphone business. In an internal memo, the company confirms plans to make massive cuts to the hardware division it acquired from Nokia, while it will also write off another $950 million.
Since acquiring Nokia for $7.2 billion three years ago, Microsoft has already written off $7.6 billion and cut 7,800 jobs worldwide. Now Terry Myerson, Microsoft’s head of Windows and devices, has announced “the additional step of streamlining.”
Up to 1,850 jobs will be cut worldwide this time around, an internal memo confirms — 1,350 of which are based in Finland. “These changes are incredibly difficult because of the impact on good people who have contributed greatly to Microsoft,” Myerson writes.
“Speaking on behalf of Satya and the entire Senior Leadership Team, we are committed to help each individual impacted with our support, resources, and respect,” the memo continues.
Myerson explains that despite great success for Windows 10 — which now has more than 300 million monthly active users — Surface, and Xbox, its smartphone success has been “limited.” As a result, Microsoft needs to be “more focused in our phone hardware efforts.”
“These latest job cuts mean that the majority of former Nokia employees are no longer working at Microsoft,” reports The Verge. Only a small number of staff will remain in research and development roles, and most of the cuts will take place before the end of the year.
Microsoft isn’t dropping its smartphone business entirely, and it insists it is still committed to universal apps, supporting Lumia users, and delivering new experiences. It also promises “great new devices” for the future.
But there’s no doubt that things don’t look good for the Lumia division. Windows smartphones now account for less than 1 percent of the worldwide smartphone market, and as that share continues to fall, things only get harder for Microsoft.