Microsoft is to lay off up to 1,850 employees from its smartphone hardware division and write off $950m (£650m, €856m) as the doors are closed on its experiment with Nokia. The computer giant bought Nokia's phone and tablet division for $7.2bn in 2014, but failed to make it a success.
Nokia is now set to re-enter the phone and tablet markets, as Microsoft adds these layoffs to 7,800 jobs it cut from its phone division in 2015; the $950 (which includes $200 in severance pay) write-off comes a year after the company wrote off $7.6bn after its plans to capitalise on the Nokia name failed.
This "streamlining" comes a week after Microsoft announced it will be selling its feature phone business to FIH Mobile, a subsidiary of Chinese company Foxconn, for $350m.
Most of the latest cuts will affect jobs in Finland, including staff Microsoft inherited through its acquisition of Nokia.
The buy-out saw 25,000 Nokia staffers switch to Microsoft, but once this latest round of cuts has taken effect, the majority will no longer work for the US company.
There will be 1,2350 jobs lost in Finland and "up to 500 additional jobs globally". Staff working at Microsoft's sales division in Finland will not be affected by the cuts.
"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," said Microsoft chief executive Satya Nadella. "We will continue to innovate across devices and on our cloud services across all mobile platforms."
An email sent to Microsoft staff by Terry Myerson, executive vice president of the Windows and Devices Group, says the company is "scaling back" but "not out" of the phone business entirely, adding that Microsoft will "develop great new devices". Rumours that Microsoft is working on a 'Surface Phone' could still be true, but this latest news must surely reduce the hope that Microsoft can truly take on Apple and Samsung.