After years of struggle, Microsoft finally let go of its Nokia phone business and agreed to sell the brand. The decision comes after two consecutive years of failure, with constant phone revenue drops. The first measure in the restructuring post-sale strategy consists in cutting 1,850 jobs mainly in Finland.
The global market share of Windows phone went below a shameful 1% in Q1, and this must have been the straw that broke the camel’s back. By closing the deal with Foxconn, Microsoft is washing its hands of its entry-level feature phone business that never brought any profit.
The decision to lay people off was not an easy one, as one internal Microsoft email sent by Terry Myerson proves it. Microsoft is grateful to all the people who backed the company’s strategies and adds it would support each individual impacted by this decision:
These changes are incredibly difficult because of the impact on good people who have contributed greatly to Microsoft. Speaking on behalf of Satya and the entire Senior Leadership Team, we are committed to help each individual impacted with our support, resources, and respect.
Myerson further explains that despite the recent Foxconn deal and job cuts, the company is not out of the market and will be focusing its efforts on innovation:
Yet our phone success has been limited to companies valuing our commitment to security, manageability, and Continuum, and with consumers who value the same. […] At the same time, our company will be pragmatic and embrace other mobile platforms with our productivity services, device management services, and development tools — regardless of a person’s phone choice, we want everyone to be able to experience what Microsoft has to offer them.
The tech giant is now directing its energy towards the upcoming Surface Phone, expected to land in 2017. This phone is actually Microsoft’s last hope to finally make it on the smartphone market. The Surface Phone is expected to be a success, yet if this proves not to be the case, most likely Microsoft will for ever exit the phone business.
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