Cuts are part of ‘restructuring plan’ largely targeting Nokia ops
Microsoft on Friday confirmed it will close a Nokia handset product development office in Salo, Finland, effectively cutting 2,300 jobs, according to a report from Reuters.
Microsoft will not close two other Nokia operations in Finland, located in Espoo and Tampere.
In July 2014, following the close of the fiscal year on June 30, Microsoft rolled out a “restructuring plan” designed to “simplify its organization and align the recently acquired Nokia devices and services business with the company’s overall strategy.” That restructuring will see 12,500 “professional and factory positions” cut through “synergies and strategic alignment of the Nokia devices and services business.” The cuts are set to be completed by mid-2015.
At that time, Microsoft said it would take between $1.1 billion and $1.6 billion in pre-tax charges over the next four years related to the job cuts, with up to $800 million related to severance and related benefit costs, and up to $800 million of “asset-related charges.”
Microsoft announced plans to acquire Nokia’s handset business in September 2013 for $7.2 billion, a deal that was consummated earlier this year. At that time, Microsoft said approximately 32,000 Nokia employees would move over, with about 4,700 employees slated to remain in Finland.
The company picked up 30,000 employees with its Nokia acquisition, bringing its total headcount to between 125,000 and 130,000. Marketing and engineering positions are reportedly being targeted for cuts, as is the company’s Xbox division.
Microsoft’s plans for the Nokia handset business are still unclear. Sales of Nokia’s Lumia line of Windows-based smartphones have been disappointing, and now Microsoft has extended Nokia’s Android experiment by launching the second-generation Nokia Android smartphone, the Nokia X2.
