Microsoft (NASDAQ: MSFT) slashed 2,100 employees from its work force, part of a previously announced plan to cut 18,000 workers as the software giant integrates former Nokia employees and shifts its focus to the cloud, mobile and productivity tools. As a result of this round of cuts, Microsoft will also close its Silicon Valley research-and-development lab.
The cuts will include 747 workers in the Puget Sound region of Washington state, where Microsoft is based, according to Bloomberg. However, it is the closure of the Microsoft Research Silicon Valley lab that came as the biggest surprise, since it is a hub of mobile application development and technology. As ZDNet notes, the lab was founded in 2001 and based in Mountain View, Calif., and the company will lose 50 jobs as a result of its closure.
A Microsoft spokesman told Reuters that Microsoft Research, which has more than 1,000 scientists and engineers around the globe developing new products, will consolidate its U.S. work at Microsoft's main headquarters in Redmond, Wash., and in offices in New York and Boston. Microsoft said it will still have 2,500 employees at its Mountain View campus, near where Google (NASDAQ: GOOG) is based.
As Re/code notes, Microsoft faces risks in shuttering operations focused on new products and growth opportunities, especially in light of its struggles in the mobile market, where its Windows Phone platform still badly lags behind Google's Android and Apple's (NASDAQ: AAPL) iOS in market share. Microsoft is confident that it is continuing to invest at an appropriate level in research and development after these cuts, Re/code reported, citing an unnamed source.
This is the second wave of job cuts at Microsoft as part of the larger 18,000 cuts, after it laid off 13,000 employees in July. The cuts include 12,500 former Nokia workers.
Before Microsoft acquired the Nokia division, Nokia had already cut tens of thousands of jobs under the leadership of Stephen Elop, who is now back at Microsoft as an executive vice president in charge of the company's devices business.
In terms of the Nokia team itself, Microsoft CEO Satya Nadella has said that the company's in-house, first-party phone portfolio "will align to Microsoft's strategic direction." To win in the higher price tiers, he wrote, Microsoft "will focus on breakthrough innovation that expresses and enlivens Microsoft's digital work and digital life experiences."
Earlier this month Microsoft took the wraps off three new Lumia-branded Windows Phone smartphones, emphasizing their higher-end specs at midrange prices. Microsoft also announced a new software update for its Lumia phones that will bring more functionality to Cortana, the digital personal assistant Microsoft introduced with Windows Phone 8.1. The company has also said it will remain committed to the basic mobile phone category.
- see this ZDNet article
- see this Reuters article
- see this Bloomberg article
- see this Re/code article
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