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Following leaks on the web of an internal memo from Windows chief Terry Myerson, Microsoft has confirmed plans to cull 1,850 jobs at the company’s smartphone hardware business.
Most of the cuts are expected to come at Nokia’s smartphone business in Finland, which Microsoft acquired in 2013 for $7.2bn.
Microsoft says up to 1,350 jobs will be lost at Microsoft Mobile Oy in Finland, plus 500 other jobs globally. Employees working for Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, are not involved in the planned reductions.
In the memo, Myerson said he was scaling back the smartphone business, but added: “We’re not [getting] out.” Strategically, this will mean supporting other mobile platforms.
Myerson’s memo said Microsoft would offer its productivity services, device management services and development tools on other mobile devices. “Regardless of a person’s phone choice, we want everyone to be able to experience what Microsoft has to offer them,” he wrote.
In what appears to be the first major casualty under the leadership of CEO Satya Nadella, Microsoft will record an impairment and restructuring charge of about $950m, of which about $200m will relate to severance payments resulting from the failed smartphone strategy.
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“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. “We will continue to innovate across devices and on our cloud services across all mobile platforms.”
Beyond its mobile phone business, Nokia is also set to cut up to 15,000 jobs, according to some on the web in preparation for its $16bn acquisition of Alcatel-Lucent, which will create one of the world’s largest networking companies.