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Microsoft Cuts 1,350 Jobs as Mobile Unit Closes

Tim Maytom

Microsoft-Logo-IRL.jpgMicrosoft has confirmed the closure of its Finnish mobile phone unit, with all 1,350 staff at the unit set to lose their jobs. The cuts are part of Microsoft's previously announced plans to shed 1,850 jobs from its smartphone business, which it bought from Nokia in 2014.

The confirmation seems to be the final nail in the coffin of Nokia as a smartphone business, following Microsoft's sale of its feature phone business and the rights to the Nokia brand earlier this year. The 500 remaining roles that are set to be cut will be spread globally.

The cuts are set to cost Microsoft around $950m (£730m) in restructuring and impairment charges, with around $200m set to go towards staff severance payments. The sale of the feature phone business to FIH Mobile only brought in $350m for the company.

The purchase of Nokia proved to something of a poisoned chalice for Microsoft, costing the company heavily while failing to produce results in terms of either revenues, or earn its cost back when later sold off. The rise of Apple and competitive Asian manufacturers like Huawei and Xiaomi ate away at both the top and bottom end of the market, and left Nokia with nowhere left to compete.

"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 CEO Satya Nadella when the cuts were first announced. “We will continue to innovate across devices and on our cloud services across all mobile platforms.”

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