Microsoft to Slash 18,000 Jobs at Nokia Handset Division
Published on: 17th Jul 2014
Rumours of mass redundancies at the former Nokia handset division now owned by Microsoft have been confirmed, and are even deeper than the rumours had hinted at.
The company said that it is planning the elimination of up to 18,000 positions over the next year.
Of the total, about 12,500 professional and factory positions will be eliminated through synergies and strategic alignment of the Nokia Devices and Services business with the rest of the company.
The actions associated with the plan are expected to be substantially complete by the end of this year, and fully completed by June 30, 2015.
Microsoft said that it expects to incur pre-tax charges of $1.1 billion to $1.6 billion over the forthcoming year to cover the costs of redundancy packaged.
The plans were outlined in an email from Microsoft CEO Satya Nadella to Microsoft employees, and an email from Microsoft Executive Vice President
In a letter to staff, Microsoft's head of devices, Stephen Elop said that it was "particularly important to recognize that the role of phones within Microsoft is different than it was within Nokia."
He noted that for Microsoft, mobile devices are simply part of a wider package of services, and that the handset division needs to reflect that change in priority within the larger group.
Going forward, phone engineering efforts are expected to be concentrated in Salo, Finland (for future, high-end Lumia products) and Tampere, Finland (for more affordable devices). Microsoft plans to ramp down engineering work in Oulu.
The company also plans to reduce the engineering in Beijing and San Diego, althoughboth sites will continue to have supporting roles, including affordable devices in Beijing and supporting specific US requirements in San Diego.
Espoo and Lund are planned to continue to be focused on application software development.
In manufacturing, the company expects to focus phone production mainly in Hanoi, with some production to continue in Beijing and Dongguan. They also plan to shift other Microsoft manufacturing and repair operations to Manaus and Reynosa respectively, and start a phased exit from Hungary.