Microsoft to cut 1850 jobs

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Microsoft to cut 1850 jobs

Struggling smartphone unit takes the axe again.

Microsoft will make more big cuts to its smartphone business, just two years after it bought handset maker Nokia in an ill-fated attempt to take on market leaders Apple and Samsung.

The company today said it would shed up to 1850 jobs, most of them in Finland, and write down US$950 million from the business. It did not say how many employees currently work on smartphones in the group as a whole.

Remaking Microsoft, known primarily for its software, into a more device-focused company was a hallmark of previous chief executive Steve Ballmer.

In one of his last major acts, Ballmer closed a deal to buy Nokia's struggling but once-dominant handset business for about US$7.2 billion in late 2013. The deal closed in April 2014, two months after Satya Nadella became CEO.

Since then, Nadella has shaved away at the phone business, starting with a 2015 restructuring that put the devices group, previously a standalone unit under former Nokia chief Stephen Elop, under the Windows group. Run by Terry Myerson, the Windows division is the company's biggest.

A Finnish union representative said the cuts would essentially put an end to Microsoft's development of new phones.

Microsoft said in a statement it would continue to develop the Windows 10 platform and support its Lumia smartphones, but gave no comment on whether it would develop new Windows phones.

Global market share of Windows smartphones fell below 1 percent in the first quarter of 2016, according to research firm Gartner.

Last year, Microsoft announced US$7.5 billion of writedowns and 7800 job cuts in its phone business.

Earlier this month, Microsoft sold its entry-level feature phones business for US$350 million.

The company said it expected to cut all 1350 jobs at its Finnish mobile phone unit and close down a research and development site in the country. A further 500 jobs will go in other countries, it said, without giving details.

"We are focusing our phone efforts where we have differentiation," Nadella said in a statement.

"We will continue to innovate across devices and on our cloud services across all mobile platforms."

Nokia dominated around 40 percent of the world's mobile phone industry in 2008 before it was eclipsed by the rise of touch-screen smartphones.

As a result, Nokia and Microsoft have slashed thousands of Finnish jobs over the past decade, and the lack of substitute jobs is the main reason for the country's current economic stagnation.

Nokia, now focused on telecom network equipment, just last week said it was cutting around 1000 jobs in Finland following its acquisition of rival Alcatel-Lucent.

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