Microsoft axes nearly 3,000 staff from smartphone division

Satya Nadella - Microsoft Press Centre

Microsoft has announced it will be shedding 2,850 jobs over the next 12 months, bringing the total number of redundancies announced this calendar year to nearly 5,000.

The news of the job losses was included in the company's annual 10-K filing with the US Securities and Exchange Commission (SEC) and is in addition to the 1,850 job cuts announced in May this year.

According to the 10-K document, the "job eliminations" will once again focus primarily on its smartphone hardware business, as well as global sales, and are an extension of a restructuring plan announced in June 2015 to cut 7,400 positions over the course of the 2016 financial year.

Microsoft currently has around 114,000 full-time employees worldwide, meaning this latest round of job cuts will reduce its headcount by about 2.5 per cent.

The company said that "these actions are expected to be completed by the end of fiscal year 2017" - i.e. 30 June 2017.

While no further details were provided exactly in terms of timescale, Microsoft did add that it expects the "Phone Hardware Restructuring Plan", which was announced last year and incorporates a number of these latest redundancies, is "expected to be completed by the end of calendar year 2016". It is not clear from the filing, however, which countries are likely to be affected.

To date, it is still not entirely clear what Microsoft intends to do with its Windows Phone business. In May, CEO Satya Nadella and head of Windows and devices Terry Myerson said Microsoft is "streamlining" and "scaling back" the unit, but both indicated it is not withdrawing from the smartphone market entirely.

Instead, it is thought the company may be turning purely to the corporate market and returning to a strategy of using third-parties to manufacture the hardware.

Jane McCallion
Deputy Editor

Jane McCallion is ITPro's Managing Editor, specializing in data centers and enterprise IT infrastructure. Before becoming Managing Editor, she held the role of Deputy Editor and, prior to that, Features Editor, managing a pool of freelance and internal writers, while continuing to specialize in enterprise IT infrastructure, and business strategy.

Prior to joining ITPro, Jane was a freelance business journalist writing as both Jane McCallion and Jane Bordenave for titles such as European CEO, World Finance, and Business Excellence Magazine.