Microsoft Layoffs Hit Nokia Hard and Take Down the X Lineup
Microsoft announced Thursday that it plans on laying off 18,000 employees worldwide with a special emphasis on trimming its mobile division. The firings represent the largest in the tech giant's 39-year history.
Of the 18,000 that Microsoft plans on letting go, approximately 12,500 of them will be from Nokia. Microsoft completed its acquisition of the Finnish-based phone manufacturer, and the job cuts mean that Nokia will lose around half of its entire workforce while the 18,000 is around 14 percent of Microsoft's total headcount.
"It's important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas. My promise to you is that we will go through this process in the most thoughtful and transparent way possible," Microsoft chief executive Satya Nadella said in an email to employees. "We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company."
Nadella added that more would be revealed during the July 22 public earnings call, and that a vast majority of the layoffs would happen over the next six months.
The layoffs show Microsoft has been taking a good look at itself in the mirror. Once the king of the tech world, Microsoft is now considered stuffy and bureaucratic compared to other tech companies such as Apple, Google, and Facebook. Microsoft Windows still beats out every other PC operating system, but its mobile ecosystem is far behind Apple's iOS and Google's Android.
The heavy emphasis on cleaning up Nokia shows just that -- that Microsoft is trying to streamline its Windows Phone efforts in hopes that results, profits, and adoption will follow.
It is particularly important to recognize that the role of phones within Microsoft is different than it was within Nokia," said Microsoft Devices Group executive vice president Stephen Elop in a separate email Thursday. "Whereas the hardware business of phones within Nokia was an end unto itself, within Microsoft all our devices are intended to embody the finest of Microsoft's digital work and digital life experiences, while accruing value to Microsoft's overall strategy. Our device strategy must reflect Microsoft's strategy and must be accomplished within an appropriate financial envelope."
Part of the shift in strategy will be to focus more and more on Windows. Nokia did make its initial foray into the Android marketplace with the Nokia X smartphone, but it looks like that line of thinking will no longer be tolerated. That's right, Microsoft is going to integrate the Nokia X lineup into the Lumia series and change the focus from Android back to Windows.
"...we plan to shift select Nokia X product designs to become Lumia products running Windows," Nadella told employees.
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