[Microsoft] announced plans to streamline the company's smartphone hardware business, which will impact up to 1,850 jobs. As a result, the company will record an impairment and restructuring charge of approximately $950 million, of which approximately $200 million will relate to severance payments.
"We are focusing our phone efforts where we have differentiation — with enterprises that value security, manageability and our Continuum capability, and consumers who value the same," said Satya Nadella, chief executive officer of Microsoft. "We will continue to innovate across devices and on our cloud services across all mobile platforms."
Microsoft anticipates this will result in the reduction of up to 1,350 jobs at Microsoft Mobile Oy in Finland, as well as up to 500 additional jobs globally. Employees working for Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, are not in scope for the planned reductions.
...The actions associated with today's announcement are expected to be substantially complete by the end of the calendar year and fully completed by July 2017, the end of the company's next fiscal year.
Which is hard news for the affected employees in Finland, but probably not totally unexpected, given the recent trends and announced plans.
There's more detail and sentiment found in a 'leaked' team memo, helpfully quoted over on The Verge:
...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:
- 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.
- 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.
- 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.
Your comments welcome, of course. Other than the manpower adjustments, nothing's really changed for you and I and the eocsystem. It's Windows 10 on every form factor, more devices from more companies (including phones) and a much more focussed first party hardware effort from Microsoft itself.