Microsoft to slash 2,850 more jobs as retreat from smartphones continues

microsoft campus building
The Microsoft campus

Microsoft (NASDAQ: MSFT) will slash 2,850 more jobs over the next year across its phone-manufacturing business and worldwide sales force as the company continues to retreat from the smartphone market.

Business Insider reported that a Microsoft filing with the U.S. Securities and Exchange Commission revealed the layoffs will come in addition to the 1,850 jobs it said it would cut two months ago. Most of those positions were in Finland at what was once Nokia's world headquarters.

Microsoft described the latest round of layoffs as "an extension of the earlier plan," and said they would be completed by the end of the company's fiscal year 2017.

The software giant said earlier this month that its phone revenue dropped a whopping 71 percent in the latest quarter as it continued to retreat from the smartphone business. Microsoft for years has struggled in vain to gain a foothold in the smartphone market, of course, and a year ago it announced plans to cut roughly 7,800, mostly from its phone business, and suffer a $7.6 billion writedown related to its 2014 acquisition of Nokia, for which it paid $7.2 billion.

Indeed, it appears Microsoft may finally have given up hope of ever becoming a major smartphone vendor or mobile operating system provider: After reporting a 73 percent plunge in Lumia handset sales during the first quarter of 2016, the company all but ignored mobile and smartphones at its Build developer conference in March, and in May it cut as many as 1,350 jobs in Finland and up to 500 jobs globally as it continued to withdraw from the smartphone business. It sold its feature-phone business to a Foxconn subsidiary two months ago in a $350 million deal that paves the way for Nokia to reenter the market.

Mobile remains a priority for Microsoft, however, as evidenced by its move last month to acquire LinkedIn for $26.2 billion. The business-centric social network saw 49 percent year-over-year growth in mobile usage, and 60 percent of its traffic now occurs on smartphones and tablets.

Microsoft may continue to push its own mobile operating system to a degree, and rumors persist that the company is developing a Surface phone. But the venerable software company appears to be finally acknowledging that much of its cloud-based business will be driven by users on phones running Android or iOS.

For more:
- see this Business Insider report

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