Microsoft will lay off 18,000 people over the next year, and its Nokia branch will be hardest hit.
Nearly 12,500 of those jobs face elimination as Microsoft subsumes Nokia, the smartphone manufacturer it acquired last year. In addition, the Nokia X line of Android smartphones, which was unveiled earlier this year, will shift its focus to Windows Phone. Current X devices will continue to be supported, but select future designs will become Lumia devices that run Microsoft’s own mobile OS, according to a memo from CEO Satya Nadella.
The layoffs come on the heels of another open letter issued by Nadella last week, in which he described his plans to reduce Microsoft’s emphasis on being a “devices and services” company and instead place greater focus on cloud-based and mobile solutions.
In an additional letter, Microsoft’s Devices and Services head Stephen Elop further detailed what direction the Lumia series will take from this point forward. The former Nokia CEO said that the company will particularly focus on boosting its market share by “targeting the more affordable smartphone segments,” a process that has already begun with recent low-cost devices like the Lumia 630 and Lumia 635. Any would-be Nokia X phones will fall into this category.
Higher-priced Lumias, meanwhile, will take advantage of the universal Windows apps initiative announced earlier this year, and generally seek to be more aligned with other Windows ventures. Altogether, the changes should make for a leaner, more focused effort for Windows Phone (unfortunately at the expense of thousands of workers), but given Nadella’s desire to move away from devices and services, the future of the group formerly known as Nokia still appears to be murky.