One week after it was revealed that Microsoft was selling its feature phone business, the company is making major changes to its smartphone division.
Microsoft is “streamlining” its smartphone hardware business, cutting 1,850 jobs global and taking a $950 million restructuring charge, around $200 million of which will cover severance payments for all of the employees losing their jobs. Microsoft says that around 1,350 jobs will be cut at the Microsoft Mobile Oy division in Finland, with the other 500 coming from other parts of the globe.
In an internal memo shared by The Verge, Microsoft head of Windows and devices Terry Myerson said that the company is “scaling back” its smartphone hardware ambitions. He says that Microsoft is “not out”, though, teasing that they will “develop great new devices” in addition to supporting current Lumia phones and handsets from other manufacturers.
Sales of Lumia phones have been falling lately and show no signs of improving, so it’s not too surprising that Microsoft is cutting back on its smartphone hardware ambitions. As hinted by Myerson, though, Microsoft may not be totally done with smartphone hardware. Rumors have suggested that they’re cooking up a Surface Phone that could launch in April 2017 with a focus on security and productivity. This rumored Surface Phone may not make a dent in Android and iOS market share with consumers, but it could be attractive to enterprise customers.