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Microsoft to shut Skype office in Sweden

Stockholm base sees 120 jobs put at risk as tech giant seeks to reduce its geographical spread

Microsoft is shutting down its Skype office in Sweden’s capital, Stockholm, putting 120 jobs under threat, the tech giant has confirmed.

The move, which Microsoft said was part of a plan to reduce its geographical spread, comes nearly six years after the company acquired the internet telephony service for $8.5bn.

“Microsoft has made the difficult decision to start consultations with the trade unions to close the Skype office in Stockholm, potentially putting at risk all 120 employees,” a Skype spokesperson said.

“This proposal is consistent with our long-term aim to reduce our geographical footprint and co-locate teams to enable better collaboration, improved engineering efficiencies and increase the pace of innovation and quality. We are deeply committed to doing everything we can to help all those impacted through this process. ”

The spokesperson said Microsoft would offer, where possible, new “opportunities” to the employees affected. But it is still unclear how many jobs will be lost or where these opportunities could be located.

This is not the first time Microsoft has streamlined its Skype division, which is headquartered in Luxembourg. In October 2016, Microsoft announced the consolidation of its Skype operations in London with up to 220 job losses as engineering roles were merged.

Skype was founded in 2003 by Swede Niklas Zennström and Dane Janus Friis and was developed by three Estonians. The company was bought by eBay in 2005 which sold its majority stake to private equity firm Silver Lake in 2009, 18 months before the Microsoft deal in 2011.

Microsoft has been integrating Skype with its own products ever since, and in 2015 replaced its own communication software, Lync, with Skype for Business. In 2015, Microsoft CEO Satya Nadella announced that Skype had more than 300 million monthly active users. The company has not disclosed its user numbers in Sweden.

Swedish business newspaper Dagens Industri reported that Skype’s Swedish office had a turnover of SEK265m (£23.8m) in 2016 and made a profit of SEK31m (£2.8m).

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