Microsoft took another step to disinvest in the business of mobile phones. The company announced on Wednesday the dismissal of 1,850 people in the division responsible for Lumia smartphones – a measure which will have a negative impact of 950 million euros in the company’s accounts.
The vast majority of staff cuts, which should be completed in July 2017, will take place in the Finnish subsidiaries of Microsoft, which had assumed a year ago that the purchase of Nokia mobile phones, made in 2014, eventually translate essentially assets worthless.
“We are focusing our efforts on mobile phones in the areas where we have differentiation,” he said in a statement, chief executive Satya Nadella, referring to the security services and management companies to devices. “We will continue to innovate in our devices and cloud services for all mobile platforms,” he added, referring to the company’s strategy to deliver applications and services to rival operating systems.
Dismissal – not the first in this business – arises when Microsoft is about to disappear from the smartphone market. According to Gartner, Windows analyst (which, in mobile phones, essentially equips Microsoft’s own devices) had in the first quarter of the year a share of 0.7%, much less than the 2.5% recorded a year earlier. The Android system, which equips handsets of various brands, had in the first quarter by 79%, while the iOS from Apple, could 18%.
Although the company has not announced plans to fully exit the segment of mobile phones, this seems to be an ongoing process. Already last week, Microsoft had given up the traditional mobile phones, which, unlike what happens with smartphones, are still marketed under the Nokia brand.
The right to use the Nokia brand (which remains the property of the Finnish multinational of the same name) and other intellectual property were sold to a new company, called HMD Global, which will develop traditional mobile phones, smartphones and tablets (with Android). On the other hand, factories and structure, distribution were sold to Taiwanese manufacturer Foxconn, which will go to work with HMD, a company based in Finland and created by former boards of Nokia and Microsoft.