Microsoft slashes more smartphone jobs
SEATTLE — Microsoft is making further cuts to what is left of its ailing smartphone business, as sales of the devices continue to fade.
The company said Wednesday that it would eliminate up to 1,850 jobs as a result of the cutbacks, about 1,350 of them in Finland, where the mobile business that Microsoft acquired from Nokia a couple of years ago originated. Microsoft will take an accounting charge of $950 million related to the cuts, it said.
In an email to all Microsoft employees sent early Wednesday, Terry Myerson, executive vice president of the company’s Windows and devices group, described the cuts as “incredibly difficult” but said that Microsoft needed “to be more focused in our phone hardware efforts.”
As downbeat a note as the layoffs were for Microsoft’s smartphone business, there isn’t much left of the army of people it once had working on the devices.
About 25,000 workers joined Microsoft as a result of the company’s acquisition of Nokia’s handset business, but Microsoft quickly felt pressure to cut costs as phone sales struggled. In 2014, Microsoft announced it was cutting 18,000 jobs, most of them related to the Nokia deal.
Last year, it eliminated an additional 7,800 jobs, trimmed the number of smartphones it offered and took a $7.6 billion accounting charge, writing off nearly the entire value of the Nokia deal. Microsoft has about 110,000 total employees.
The acquisition of Nokia’s mobile business will go down as one of the costlier missteps in Microsoft’s history.
The company’s previous chief executive, Steve Ballmer, made the deal with the goal of transforming Microsoft, a company that was struggling to keep pace with the likes of Apple and Google in the mobile business.
But the fortunes of Nokia, a once-mighty player in mobile, had already soured as sales of traditional cellphones lost ground to software-rich smartphones. The combination of its hardware expertise and Microsoft’s software skills never produced the results that Microsoft had hoped for.