All is not Well with Microsoft’s Phone business and even Microsoft knows this. Just last week the company announced 4,500 job cuts as well as its decision to sell off its feature phone business to FIH Mobile (FXCNY), a Foxconn subsidiary, and a Nokia-owned Finnish company called HMD Global for $350 million. And although Microsoft mentioned that it’ll still support current Lumia Phones, they didn’t say anything about making any new phones.
Then this week, the latest Gartner report showed that Windows Phone sales dropped all the way from 8.27 million units sold in Q1 of 2015 to only 2.4 million units sold in Q1 of 2016.
But the not-so-pleasant news doesn’t even end there. Today, Microsoft has announced that in addition to the 4,500 job cuts it announced last week, an additional 1,850 employees will also lose their jobs. From what I’ve read so far, the majority of workers who will be affected by this particular set of job cuts are from Finland, which happens to be Nokia’s base.
According to the company, this latest round of job cuts is expected to cost the company $950 million, out of which $200 million will be spent to cover the severance payments of affected employees.
Could this mean Microsoft is quitting the phone business all together?
No. According to Microsoft CEO Satya Nadella “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..We will continue to innovate across devices and on our cloud services across all mobile platforms.”
Suffice that to mean – we’re still in the game. We’re just making all these changes to focus on the things we know how to do best.
Goodluck with that Microsoft. Goodluck.