Microsoft Seals Nokia's Fate, Cuts 1,850 Jobs - InformationWeek
IoT
IoT
Software
News
5/25/2016
01:05 PM
Connect Directly
Twitter
LinkedIn
Google+
RSS
E-Mail
0%
100%

Microsoft Seals Nokia's Fate, Cuts 1,850 Jobs

Microsoft is slashing up to 1,850 jobs, mostly in Nokia's home country of Finland, and taking on a $950 million restructuring charge as it streamlines its phone business.

Microsoft's Mobile Roller Coaster Ride: 9 Contributing Factors
Microsoft's Mobile Roller Coaster Ride: 9 Contributing Factors
(Click image for larger view and slideshow.)

Microsoft has announced 1,850 job cuts and a financial hit of nearly $1 billion as a result of its failed Nokia acquisition. This is Redmond's latest move to streamline its phone hardware business.

Most of the job cuts will hit Microsoft Mobile Oy in Finland, where the company anticipates up to 1,350 jobs will be affected. Up to 500 additional jobs will be cut worldwide.

Today's news also includes a restructuring charge of about $950 million, which will be recorded as impairment of assets in its More Personal Computing division for the fourth fiscal quarter of 2016. About $200 million will go to severance payouts for affected employees.

[Read: Windows Mobile Slides Closer to Oblivion]

The jobs cuts are intended to rid Microsoft of all remaining ties to its $7.2 billion acquisition of Nokia's phone division. This update essentially takes Microsoft out of the consumer phone business, but the company remains committed to holding onto part of the mobile market.

"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 CEO Satya Nadella in a May 25 statement. "We will continue to innovate across devices and on our cloud services across all mobile platforms."

Since he took over as CEO, Nadella has adopted a mobile strategy significantly different from that of predecessor Steve Ballmer. He has overseen thousands of job cuts and restructuring charges totaling billions of dollars as he slowly changed Microsoft's approach to mobile.

Microsoft announced its largest layoff ever in July 2014, when it cut 18,000 jobs. Most layoffs resulted from the integration of Nokia's Devices and Services Division. At the time, Nadella stated the layoffs would also begin a series of changes to how the company operates.

The transformation continued with an executive shake-up that resulted in the departure of Nokia CEO Stephen Elop and several Microsoft executives. Nadella noted the changes aligned with Microsoft's new core ambitions: creating more personal computing, reinventing productivity and business processes, and building the intelligent cloud.

The axe swung again in July 2015, when Microsoft eliminated 7,800 global jobs, mostly in its smartphone division. While Nadella reaffirmed his commitment to mobile, he noted Microsoft would concentrate on serving the enterprise, emerging markets, and flagship-seeking consumers.

(Image: MichalPuchala/iStockphoto)

(Image: MichalPuchala/iStockphoto)

Shortly after, Microsoft reported a $7.5 billion write-down at the close of its 2015 fiscal year. The write-down resulted in a $3.2 billion quarterly loss and $780 million restructuring charge related to its Nokia acquisition.

Last week, Microsoft announced plans to sell its entry-level feature phone division to HMD Global and Foxconn subsidiary FIH Mobile for $350 million. When the deal closes later this year, about 4,500 Microsoft employees will be transferred to, or have the option to join, either buyer.

Despite its rapidly shrinking phone business and thousands of job cuts, Microsoft claims it is still committed to mobile. Terry Myerson, EVP of the Windows and Devices Group, echoed Nadella's words in an internal memo to employees published by Recode.

Myerson emphasizes, "We're scaling back, but we're not out!" in terms of Microsoft's mobile presence, but notes the company needs to be more focused.

He lists three areas of focus for Windows strategy: Universal Apps, innovating across Windows devices, and providing updates and support for current Lumia and OEM partner phones. Myerson also reaffirms a commitment to creating productivity, device management, and development tools for other mobile platforms.

Help Wanted. InformationWeek's hosted, searchable job board can help you find your next gig. Start your search today.

Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Page 1 / 2   >   >>
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Author
6/1/2016 | 4:19:02 AM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
Impactnow, they are not doing any marketing and as I said, they don't want to enter the market in the traditional way. They are not currently selling or shipping to the US. They might do it in the future, though. I found this: https://fairphone.zendesk.com/hc/en-us/articles/202654358-Do-you-sell-and-ship-the-Fairphone-2-outside-of-Europe-
impactnow
50%
50%
impactnow,
User Rank: Author
5/31/2016 | 10:28:34 PM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
Susan I haven't seen any of their phones in the US our phone market is just crazy all the vendors are playing pricing games and compatibility games with the phones. The consumers are paying dearly for their phones and plans we really need a market entrant that will shake up the market and make the phones better and more affordable.
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Author
5/31/2016 | 1:28:06 PM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
Impactnow, oh, you did? :) Yes, they have a good recycling program, and also the phones can easily be fixed. They haven't joined the market. You can't find them in the electronics shops. You have. to order the phone through the Website. I haven't checked, but I suppose they ship to the US as well, not just Europe. The company is based in Amsterdam, the Netherlands. Time ago they said they are not interested in competing with Apple, Samsung, etc. So, expansion in that sense won't happen since orders are only online, and I believe they are only by pre-order. They are interested in manufacturing an ethical phone, that can last, easy to repair, and recyclable. I haven't seen many, or I haven't paid attention. I don't really look at the phones people are carrying. :) -Susan
impactnow
50%
50%
impactnow,
User Rank: Author
5/31/2016 | 12:01:59 PM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
Susan I just looked at their website I love the idea especially of recycling the phones my closet is filled with electronic waste! I hope that they are successful and are able to expand to the US. Have you seen them in use in your area of the world?
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Author
5/31/2016 | 2:59:35 AM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
impactnow, yes, most likely that's what will happen.

There were a few new smartphones debuting a few years ago that were promising. From all those, from the only one I have heard lately is Jolla.

There was the Fairphone as well, that used all conflict-free components. The founders of the startup went to Congo to make sure of this. It was quite interesting. They were not sure, though, if they would continue manufacturing phones after the first batch. It was some sort of experimenting since the main point of the company was to fight conflict minerals trade. Have you heard anything? 

-Susan
impactnow
50%
50%
impactnow,
User Rank: Author
5/31/2016 | 12:32:25 AM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
Susan, yes there still are a few smaller players but as the price of smartphones to continue to rise these players will most likely go away or consolidate. The reality for phones will become like the reality for PCs a few players with few new entrants.
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Author
5/29/2016 | 3:55:32 AM
Re: Nokia: Microsoft Calls it Quits ?
Technorati, and don't forget Elop's mess. -Susan
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Author
5/29/2016 | 3:54:13 AM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
impactnow, yes, true. Smaller phone manufacturers might still exist. However, they shouldn't expect to have sales like Apple, or Samsung, which are the only real ones dominating the smartphone market. Windows phones never were on the map. The irony is as follows: Microsoft adventure in the smartphone business was short and is dead, just as it was predicted by analysts, and others, including myself. Nokia's original devices and services division disappeared, ceased to exist when Microsoft bought it (they can thank Elop for all the mess). One of Nokia's remaining divsions, Nokia Technologies, brings back Nokia branded smartphones and tablets to the market. Yet, once again: Nokia and Microsoft are two different companies and not in partnerships any longer. -Susan
impactnow
50%
50%
impactnow,
User Rank: Author
5/28/2016 | 11:12:22 PM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
Very true but the reality remains the phone market is consolidating, with the current price points of cellular phones the market cannot bear so many brands . It is much like we saw with the PC and laptop markets in the 90s . They will ultimately only be a few manufacturers of mobile phones and the rest will cease to exist .
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Author
5/28/2016 | 5:11:30 AM
Re: Nokia: Microsoft Calls it Quits ? Nokia is not Microsoft.
I don't know how many times I have said that the current Nokia --with its remaining divisions after Elop sold Nokia's devices & services to Microsoft-- has nothing to do with Microsoft. This means that linking the Nokia name to Microsoft's job cuts is inacurate. Those who will lose their jobs are Microsoft employees, not Nokia's. -Susan
Page 1 / 2   >   >>
2018 State of the Cloud
2018 State of the Cloud
Cloud adoption is growing, but how are organizations taking advantage of it? Interop ITX and InformationWeek surveyed technology decision-makers to find out, read this report to discover what they had to say!
Commentary
Tech Vendors to Watch in 2019
Susan Fogarty, Editor in Chief,  11/13/2018
Commentary
Getting DevOps Wrong: Top 5 Mistakes Organizations Make
Bill Kleyman, Writer/Blogger/Speaker,  11/2/2018
Commentary
AI & Machine Learning: An Enterprise Guide
James M. Connolly, Executive Managing Editor, InformationWeekEditor in Chief,  9/27/2018
Register for InformationWeek Newsletters
Video
Current Issue
The Next Generation of IT Support
The workforce is changing as businesses become global and technology erodes geographical and physical barriers.IT organizations are critical to enabling this transition and can utilize next-generation tools and strategies to provide world-class support regardless of location, platform or device
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll