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Microsoft lays off hundreds as it guts its phone business

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Microsoft is signalling the end of its Nokia experiment today. After acquiring Nokia's phone business for $7.2 billion two years ago, Microsoft wrote off $7.6 billion last year and cut 7,800 jobs to refocus its phone efforts. Microsoft is now writing off an additional $950 million today as part of its failed Nokia acquisition, and the company plans to cut a further 1,850 jobs. Most of the layoffs will affect employees at Microsoft's Mobile division in Finland, with 1,350 job losses there and 500 globally. Around $200 million of the $950 million impairment charge is being used for severance payments.

These latest job cuts mean that the majority of former Nokia employees are no longer working at Microsoft.
http://www.theverge.com/2016/5/25/11766344/microsoft-nokia-impairment-layoffs-may-2016

Internal memo:

Team,

Last week we announced the sale of our feature phone business. Today I want to share that we are taking the additional step of streamlining our smartphone hardware business, and we anticipate this will impact up to 1,850 jobs worldwide, up to 1,350 of which are in Finland. 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.
For context, Windows 10 recently crossed 300 million monthly active devices, our Surface and Xbox customer satisfaction is at record levels, and HoloLens enthusiasts are developing incredible new experiences. Yet our phone success has been limited to companies valuing our commitment to security, manageability, and Continuum, and with consumers who value the same. Thus, we need to be more focused in our phone hardware efforts.
With this focus, our Windows strategy remains unchanged:
  1. Universal apps. We have built an amazing platform, with a rich innovation roadmap ahead. Expanding the devices we reach and the capabilities for developers is our top priority.
  2. We always take care of our customers, Windows phones are no exception. We will continue to update and support our current Lumia and OEM partner phones, and develop great new devices.
  3. We remain steadfast in our pursuit of innovation across our Windows devices and our services to create new and delightful experiences. Our best work for customers comes from our device, platform, and service combination.
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.
With that all said... I used the words "be more focused" above. This in fact describes what we are doing (we're scaling back, but we're not out!), but at the same time I don't love it because it lacks the emotional impact of this decision. 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. At the same time, Ars Technica recently published a long story documenting our journey to create the universal platform for our developers. The story shows the real challenges we faced, and the grit required to get it done. The story closes with this:
"And as long as it has taken the company, Microsoft has still arguably achieved something that its competitors have not... It took more than two decades to get there, but Microsoft still somehow got there first."
For me, that's what focus can deliver for us, and now we get to build on that foundation to build amazing products.
Terry
http://www.theverge.com/2016/5/25/11766354/microsoft-terry-myerson-smartphone-streamlining-memo
 

IvanJ

Banned
Ballmer really stuck it to MS with the Nokia deal, they took a $8+ billion bath and got nothing in return.
Lucky for them that they keep making money elsewhere, a weaker company would have folded altogether after a debacle like this.

I don't think Microsoft is very popular in Finland lately.
 

sankt-Antonio

:^)--?-<
As a OEM Lumina user (forced) I had high hopes they would vanish entirely and stop supporting these phones. So I could get a phone that actually works as intended.

It's fucked up that the employees are not relocated to other jobs within MS.
 

Funky Papa

FUNK-Y-PPA-4
Weird. Loads of people have then in England.

Microsoft did the stupidest thing by focusing on America instead of Europe, where Windows Phone still had a fighting chance.

This basically signals the end of Lumia and Microsoft's manufacturing efforts besides an eventual Surface Phone.
 
We're having a good streak here in Finland with 1000 people laid off by Nokia and now 1350 by Microsoft (assuming they're all indeed being laid off).
 
We always take care of our customers, Windows phones are no exception. We will continue to update and support our current Lumia and OEM partner phones, and develop great new devices.

I'm looking forward to future here maps updates lol
Universal apps. We have built an amazing platform, with a rich innovation roadmap ahead. Expanding the devices we reach and the capabilities for developers is our top priority.

Keep telling yourself that, Microsoft.
 

Funky Papa

FUNK-Y-PPA-4
I'm looking forward to future here maps updates lol
This pisses me off to no end because I actually think Here Maps is a heck of a lot better than Google Maps, specially for car navigation and international travel. It's the one Google service I didn't miss as a WP user.
 
This pisses me off to no end because I actually think Here Maps is a heck of a lot better than Google Maps, specially for car navigation and international travel. It's the one Google service I didn't miss as a WP user.

I like here maps, the only thing I don't like is that my position is only represented as a circle. Would be better to have an arrow so you instantly know what direction you are facing relative to the map.
 

jelly

Member
I think Remedy guys are closely watching this Nokia disaster... and working on their CVs in spare time.

They don't own Remedy. Microsoft may not fund another project but Remedy can do other things.

Sucks for people losing their jobs, that's a big number and doubtful new Nokia mobile will do anything but cherry pick who they know is the best.

I wonder if Nokia are seen as the bad guys too, they got paid 7 billion, Microsoft fired all their staff for them really and started over.
 

Donos

Member
Still sad we didn't get a proper high-end Andoid Nokia Flagship. Nokia Hardware was always awesome. That N97 mini still has such an outstanding keypad. Dat Symbian though...
 

Caayn

Member
It didn't help that their new flagships(950/950XL) had two problems.

1. Price. The price was steep for an relatively unknown platform.
2. Lack of marketing outside the US. Seriously Microsoft there's more to the world than just the US. This is especially bad as the Windows Mobile had a better marketshare in the EU than in the US.
 

artsi

Member
They packed all the employees into buses and transported them to a hockey arena for the announcement. I guess everyone knew what's happening but sucks for them.

Difficult to find a job in a small country like this when there are thousands of capable, recently laid off people competiting for them.
 

BriGuy

Member
I don't have much of a frame of reference, but that memo seems oddly indifferent to the people whose jobs and livelihoods are going to be affected. 95% of it is self-congratulatory crap.
 

EGM1966

Member
Deader than dead now.

They were too late to the party, too unprepared when they did eventually get to the party and too unfocused in their communication to the consumer market.

TBH I'm of the view their short term strong consumer connection with 360 was a bit of a fluke. MS really struggle in heavy consumer centric market engagement. Like many commercially focused ventures they're too fuzzy and slow. Consumers need clear propositions right away.

That said since Jobs passed Apple has been losing its edge there too IMHO so it's not just MS.

Apple though have advantage of existing consumer mindshare, MS started as a bit player and went downhill from there.

Surface phone it is.

Elop sure helped kill Nokia though. Really tough run for Finland with that one.
 

HUELEN10

Member
No more Lumias?

Some of the best and most loved handsets that weren't designed in Cupertino.

I will miss them a lot. :(
 

cw_sasuke

If all DLC came tied to $13 figurines, I'd consider all DLC to be free
Microsoft did the stupidest thing by focusing on America instead of Europe, where Windows Phone still had a fighting chance.

This basically signals the end of Lumia and Microsoft's manufacturing efforts besides an eventual Surface Phone.

I dont think this is true at all...def. not enough to make the whole endeavor make it worth the cost. The cheaper Lumia Phones sold well for a while because they had to sell them for cheap because of low demand to begin with.
 

Funky Papa

FUNK-Y-PPA-4
I dont think this is true at all...def. not enough to make the whole endeavor make it worth the cost. The cheaper Lumia Phones sold well for a while because they had to sell them for cheap because of low demand to begin with.

At some point Microsoft held comparable and enven bigger marketshares than iOS in some key European countries such as Italy and Spain. Some of those devices were cheap, but the 920 (which was quite pricey at the time) was one of their best sellers for a while.

Then Microsoft ceased all marketing efforts and gave up on flaghships for an entire cycle, killing Windows Phone in a single year. People looking for a new Windows Phone had nothing to look forward. One could argue that is still the case, as the 950 still lacks some of the features introduced by the then-revolutionary 920 and Windows 10 turned out to be a buggy mess. There was no incentive to upgrade. If you pass through the Windows Phone OT you will notice that many (most?) of us just gave up despite our love for the platform.
 
Nadella's endgame at finally undoing Ballmer's Folly is nearly here. I feel sad when thinking about Nokia, once the pride and joy of Finland. They were destroyed by Microsoft, Steve Ballmer, and Stephen Elop. Tens of thousands of jobs, hundreds of billions of dollars of economic value, a company more than a century old were all sacrificed to MS corporate infighting, the forced departure of an embattled longtime CEO, and the shifting of goals when a new CEO arrived.

Just imagine where would Nokia be if they were never acquired by Microsoft and made Android phones instead.

It's not clear that would have been a path to success either. I mean Blackberry gave up the ghost and made their Android phone way too late to save themselves, but at the time of Elop's arrival there Nokia were still knee deep in Symbian and other projects like MeeGo. If they also had waited as long as Blackberry did to move to Android, they would have died just the same.
 

mrklaw

MrArseFace
They fucked about with windows phone OS too soon, alienating initial users, they diluted the industrial design to a point where they were just nondescript blocks of plastic, and their unifying platform came at least a year, probably two, too late.

sad really. Although Nokia at the time of purchase was in bad shape, I think they could have pulled through - the network business was picking up which, along with their patent pool could have helped keep a slimmer Nokia afloat. And they still have huge brand value in India and Asian markets with feature phones. They were basically giving up on Symbian at the time and would probably have moved to Android. Combined with their solid supply chain management at their core, plus their really nice industrial design I think they could have carved out a future.

I worked there for many years and have lots of fond memories ;_;
 

GCX

Member
Nadella's endgame at finally undoing Ballmer's Folly is nearly here. I feel sad when thinking about Nokia, once the pride and joy of Finland. They were destroyed by Microsoft, Steve Ballmer, and Stephen Elop. Tens of thousands of jobs, hundreds of billions of dollars of economic value, a company more than a century old were all sacrificed to MS corporate infighting, the forced departure of an embattled longtime CEO, and the shifting of goals when a new CEO arrived.
Nokia wasn't destroyed, it's still a healthy company with 110 000 employees and $24 billion revenue. It successfully transformed from a phone company to a network company by selling the sick part (phone business) and buying new ones (Alcatel Lucent).
 

Famassu

Member
Too bad. As far as the OS goes, out of the box Windows mobile OS is far superior to Android. It may not have the app/game support, but I far prefer using a Lumia over Android phones. I prefer the layout & continuous scrolling to flipping pages, a lot of small simple stuff just are there that are missing from Android or used in a more cumbersome way and altogether I like the somewhat simpler approach/look in comparison to the way Android does it. It's a phone, I don't need it to be a mini-PC. As far as apps go, it has less to choose from, but all-in-all I feel I didn't miss anything much other than games. I got my sports tracker, bank app, news app, music app, a really good camera & its basic app, weather app, whatsapp/messenger/skype and a few more specific apps that I use a lot. There are some that are missing or don't have all that good alternatives, but most of those are on the level of "nice to have but don't use them regularly and can live without them"
 

Alx

Member
Nokia wasn't destroyed, it's still a healthy company with 110 000 employees and $24 billion revenue. It successfully transformed from a phone company to a network company by selling the sick part (phone business) and buying new ones (Alcatel Lucent).

Yes, and remember Nokia started as a toilet paper company. ;) They apparently just adapt to new situations by easily changing their main focus.
 
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