Microsoft on Wednesday announced another reorganization of its smartphone business with plans to streamline operations and eliminate redundant personnel. The company will lay off 1850 of its employees in Finland and other countries and will take a $950 million charge. The actions seem to be in line with Microsoft’s plans to focus on development of flagship smartphones and leave the market of mass handsets.

When Microsoft closed its acquisition of Nokia in late April, 2014, it received approximately 25,000 new employees from around the world, who were involved into development, production, sales, and distribution of smartphones and feature phones. Shortly after, in July, 2014, Microsoft laid off 12,500 former Nokia staff as a part of its major reorganization, when it let go 18,000 Microsoft employees in total. The first wave of dismissals eradicated numerous positions at Nokia and shut down the division, which developed software for feature phones, leading to eventual elimination of Asha devices from Microsoft’s lineup.

A year after the company announced the first phase of streamlining, the software giant revealed further plans for phone business restructuring. In July, 2015, Microsoft decided take an impairment charge of approximately $7.6 billion related to assets associated with the acquisition of the Nokia Devices and Services business, and take a restructuring charge of approximately $750 million to $850 million. As part of its second phase of optimizations, the company laid off another 7,800 former Nokia employees globally. Besides, Microsoft announced their intentions to focus on flagship smartphones and generally to phase out inexpensive handsets going forward.

Today’s announcement further eliminates 1350 jobs in Finland as well as 500 additional jobs globally. The actions are to be fully completed by July, 2017, and will cost Microsoft approximately $200 million related to severance payments. Microsoft further noted that sales teams based in Espoo, Finland, will not be affected by the layoffs.

As a result of its optimizations of the handset business, by mid-2017 Microsoft will have eliminated approximately 21,650 former Nokia employees out of the iniitlal ~25,000 who joined Microsoft in 2014. Moreover, as 4,500 former Nokia staff are set to join FIH Mobile or HMD Global in the coming months, it means that by mid-2017 the absolute majority of the former Nokia employees will be gone from Microsoft.

Microsoft did not reveal any new plans concerning its smartphones going forward, but repeated what it said in 2015: the company will concentrate on flagship models and will support its traditional hardware partners with development of their smartphones featuring Windows 10 Mobile. The software giant sees security, manageability and Continuum feature as its key strengths on the smartphone market going forward, which essentially indicates that the company sees enterprises as the main customers for its handsets. Microsoft did not mention its PureView camera and other consumer focused assets it got from Nokia as its unique advantages to address consumers, which may indicate that the company no longer considers consumers as its main customers in the smartphone world.

“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 Satya Nadella, chief executive officer of Microsoft. “We will continue to innovate across devices and on our cloud services across all mobile platforms.”

What the head of Microsoft did mention is that the company will continue to offer cloud-based services to all mobile platforms. Again, this is not something new as it emphasizes Satya Nadella’s cloud approach to mobile and his reluctance to fight against Apple, Google and Samsung in the world of mobile platforms and mobile hardware.

Source: Microsoft

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  • Kvaern1 - Friday, May 27, 2016 - link

    You sir are my hero.

    Thanks a lot for the new client tip
  • Carmen00 - Thursday, May 26, 2016 - link

    They have some very strong areas. Their development tools are lightyears ahead of almost everyone else. Apple's development tools can come close in terms of usability, but cannot touch the sheer breadth of Microsoft's offerings in terms of languages, cross-platform story, support, developer productivity, hardware support, and so on.

    Windows 10 may take your data, but it's an excellent operating system nevertheless. It's more stable, more featureful, and more secure than any previous Windows. It can hold its own against Ubuntu and OS X. There are some parts of it that are still shoddy (e.g. I swap out Edge for Chrome all the time), but one can say the same about any operating system.

    The Office offerings are excellent, and improving year-on-year. I hardly use them because Google Drive makes collaboration simpler, but I cannot deny that they make it ridiculously easy to create good-looking things.

    Microsoft Research is churning out some truly excellent work, and have been for some time.

    Microsoft has genuine competitors that didn't exist (or weren't strong enough to challenge it) 10-15 years ago. In comparison to them, it's worse in some areas and better in others. It would be a serious mistake to write them off as not being good at anything, though.
  • tim851 - Thursday, May 26, 2016 - link

    The issue with Windows is that, on the desktop, 7 was almost flawless for its time. In their endeavor to unify all platforms, Microsoft took a flawless OS and instead of improving it, they uprooted it. Windows 8's user interface was a mess, a clash of styles and most of the Metro design language cues didn't translate terribly well to big screens and mouse driven input.
    They tuned it down with Windows 10 but it's still not as cohesive as the OS they released 7 years ago and a lot of people, especially non-geeks, are fussy about Microsoft constantly changing workflows and button-locations.
    Essentially, Microsoft seems to lack direction since 2009. Feels like they exchange key staff at least twice a year.

    On the mobile side, Windows Phone 7 was bold and inspired.
    They made Apple de-skeuomorphize iOS.
    They lead.
    But Microsoft got afraid of their own courage. Again, lacking direction, they wavered with Windows 10 Mobile and have started to copy Apple's take on their own design.

    Microsoft for the past 5-6 years looks like a company unsure of what it wants to be, of where it wants to go. They wanna be Google or Apple, but they are more like Samsung: a big, unfocused corporation afraid of missing a trend, releasing me-too products and more or less half-heartedly committing to every niche of IT.

    The one area they are innovative in is the Surface division. There's been rumors that they'll make a Surface phone and that seems to be the only hope they have in the phone sector.
  • BurntMyBacon - Thursday, May 26, 2016 - link

    @tim851: "On the mobile side, Windows Phone 7 was bold and inspired."

    Kinder words than they usually get, but you're not wrong.

    @tim851: "... they wavered with Windows 10 Mobile and have started to copy Apple's take on their own design."

    I'm afraid you lost me there. Admittedly, I don't keep up with iOS products very well, but I have several family members with iOS. Can you give a few examples here? I just can't see them as very similar at all.

    @tim851: "The one area they are innovative in is the Surface division. There's been rumors that they'll make a Surface phone and that seems to be the only hope they have in the phone sector."

    I'm curious as to what it may offer that the Lumia 950(XL) doesn't at this point. They're big focuses (according to the article) are:
    1) Security - I've already seen fewer high profile security vulnerabilities, but they could have new security features to bring to the table.
    2) Manageability - Seems like they got a lot of these features with Win10 mobile
    3) Continuum - Check

    I'd personally like to see proper alias support from any of the mobile ecosystems. It's frustrating not being able to respond to emails because it won't send the message back out as the alias that it was sent to.
  • mdriftmeyer - Thursday, May 26, 2016 - link

    Their tools and frameworks are so good that's why OS X's creation of Clang and billions invested in their frameworks and tools are eating their lunch on profits and global market share in complete presence. With over 1 billion iOS mobile devices sold its clear Microsoft was dead by 1996.
  • mdriftmeyer - Thursday, May 26, 2016 - link

    When you adopt Clang/LLVM to prop up your Visual Studio you are tacitly admitting defeat.
  • ddriver - Thursday, May 26, 2016 - link

    They are good at exploiting their monopoly and subsequent economic and political connections.
  • Flunk - Wednesday, May 25, 2016 - link

    Considering how every other modern consumer OS sends as much or more information to it's creator, you look a bit foolish saying that. Android, as an example, sends significantly more of your personal information and usage details to Google. It's essentially datamining everything you do with your phone.
  • Samus - Thursday, May 26, 2016 - link

    I agree. Peoples paranoia over Windows phoning home is a bit ridiculous. Hell, in a certain light I'd trust Microsoft with my data over Google.

    The only OS you can really rely on for privacy is a open source Linux distro. OSX is fairly private but updates are still centrally source and the code is proprietary so unless you actually trust Apple as much as they say you should, all bets are off. But many of the top tier white hats and security engineers all use OSX and they are comfortable with it, so who knows.
  • BurntMyBacon - Thursday, May 26, 2016 - link

    @Samus: "But many of the top tier white hats and security engineers all use OSX and they are comfortable with it, so who knows."

    It could be that they feel like there is less risk. Risk is a combination of threat, exploitable weaknesses, and potential damage. If we assume the threat is equal and the potential damage is equal, then implication is that OSX has fewer exploitable weaknesses (vulnerabilities). Apple may in fact have more weaknesses, but the more Apple pulls into their walled in garden, the harder they are to exploit. I'm sure using OpenBSD for their kernel doesn't hurt either. Of course, the threat is not in fact equal. Microsoft is still the most targeted OS and Linux is still the least targeted due to breadth of applicability for any vulnerability. Also, the risk to the system is lower the more applications and the OS isolate processes (think sandboxing). Sure sandboxes and VM can be subverted, but that is one more vulnerability that needs to be exploited before damage can occur.

    Of course it could more simple than that. They may like OSX better because it is less risky than equally usable systems and significantly more usable than a clearly more secure system. Gentoo, OpenBSD, and other minimalistic operating systems tend to have very small attack surfaces and are most likely less vulnerable than OSX, but they aren't nearly as easy to use in practice, particularly if you have specific software needs.

    Finally, while the two can overlap, privacy and security are two different things. Top tier white hats may prioritize security and/or usability over privacy. Note that not all top tier white hats use OSX, so there are probably differences of priority here. It is probably a tradeoff similar to the security posture. They may like OSX better because it is more usable than better privacy oriented systems and at least as privacy oriented as a more usable system (or some combination of the above tradeoffs).

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