Microsoft Shrinks Smartphone Division

Microsoft is further shrinking its mobile division with yet another round of layoffs.

Microsoft is further shrinking its mobile division with yet another round of layoffs.

This time, the tech giant is eliminating as many as 1,850 jobs as it struggles to keep its Finland-based Nokia division afloat. As many as 1,350 of those layoffs will come from the Finnish division of Nokia, which it acquired a couple years ago.

“When I look back on our journey in mobility, we’ve done hard work and had great ideas but have not always had the alignment needed across the company to make an impact,” wrote Terry Myerson, Microsoft's executive VP of the Windows division, in an email to Microsoft employees.

With the $7.2 billion acquisition, an estimated 25,000 workers joined Microsoft's forces. Soon after the completion of the deal, Microsoft first swung its axe in 2014 to cut about 18,000 Nokia deal-related jobs, as it struggled to stall the declining phone sales amidst competition from Apple and Google.

And then came another round of layoffs last year in which Microsoft eliminated another 7,800 jobs, cut down on its smartphone models and absorbed a $7.6 billion accounting charge, all of which essentially prove that Microsoft made a bad judgment call by acquiring the Finnish smartphone maker that was already losing big.

Originally, Microsoft acquired Nokia to invigorate its product line and enter the smartphone industry — a lack of presence in which was proving to be a big deterrent for Microsoft's growth. The deal was made by Microsoft's previous CEO, Steven A. Ballmer.

Needless to say, the Nokia acquisition did little to help Microsoft improve on its position in the market. Despite seeing some success in the sales of its smartphones, the company failed to excite the independent developer community to help build its ecosystem, The New York Times reported.

While, after the latest round of layoffs, little seems to be left to turn its mobile business around, Microsoft CEO Satya Nadella is taking a different approach to salvage it. He is reportedly redirecting efforts to use the development team to improve upon and build iPhone and Android apps for its Office suite.



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