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Microsoft phone unit to lose 1,000 jobs, report says

The 1,000 job cuts reportedly would occur in Nokia's home base of Finland, amid what could be a much larger round of layoffs.

Nokia has designed many phones over the years, as seen in this display at its headquarters in Finland. Roger Cheng/CNET

Microsoft could cut as many as 1,000 jobs in Finland, the Finnish daily newspaper Helsingin Sanomat said Wednesday, citing two sources with knowledge of the plans.

As part of the layoffs, Microsoft's research and product development facility in Oulu, Finland, could be closed, according to the Helsinki Times, referring to the report from Helsingin Sanomat. Focused on creating software for low-cost mobile phones, that facility employs around 500 workers. The other half of the layoffs reportedly would come from other facilities in Finland.

Microsoft took ownership of Nokia's handset division in April and has since faced the task of integrating the unit and its workers. The software giant added around 25,000 Nokia employees when it closed the deal in April. But a round of job cuts is likely needed if Microsoft is to eliminate duplicate and unnecessary positions as a result of the purchase.

And such cuts could grow much larger than just the 1,000 people in Finland.

On Monday, Bloomberg reported that Microsoft could be eyeing its largest round of layoffs in five years. Citing people with knowledge of Microsoft's plans, Bloomberg said that job cuts could surpass the 5,800 positions slashed in 2009. The layoffs would likely impact jobs in the Nokia unit that duplicate ones at Microsoft, as well as those in marketing and engineering.

On Friday, Nomura Securities analyst Rick Sherlund predicted that layoffs at Microsoft, news of which he expects to come with the company's earnings report on July 22, will be somewhere between 5 percent and 10 percent of Microsoft's employee head count.

Windows Phone also faces a tough climate in a mobile phone market dominated by Android and the iPhone. Though Microsoft's mobile OS has slowly seen increased demand, its market share continues to hover around 3 percent, according to a recent IDC report. Market leader Android holds around an 80 percent share, leaving iOS with roughly 15 percent.

Asked to comment on the report, a Microsoft spokesman told CNET that the company is not commenting on speculation.

(Via Reuters)