Microsoft retreats from phone business with more job cuts

Hundreds of employees will be laid off from the company's devices division.

Katie Collins
Katie Collins Senior European Correspondent
Katie a UK-based news reporter and features writer. Officially, she is CNET's European correspondent, covering tech policy and Big Tech in the EU and UK. Unofficially, she serves as CNET's Taylor Swift correspondent. You can also find her writing about tech for good, ethics and human rights, the climate crisis, robots, travel and digital culture. She was once described a "living synth" by London's Evening Standard for having a microchip injected into her hand.
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Watch this: Trouble for Windows Phone: Microsoft makes cuts to mobile business

Microsoft is continuing its retreat from the mobile phone business with massive job cuts in its devices division.

The company announced Wednesday that it would be axing 1,850 jobs in addition to the 4,500 job cuts that were announced last week, along with the sale of its feature phone business.

The majority of the losses affect employees in Finland, where Nokia, whose phone operations Microsoft purchased in 2014, has always had its base. In addition to the job cuts, the company is writing off $950 million.

That nearly billion-dollar hit echoes the much larger financial blast of just a year ago, when Microsoft announced a $7.5 billion write-down tied to the Nokia deal. The acquisition's quick failure showed just how hard it can be for even a deep-pocketed technology giant to go up against the two dynamos of the mobile phone business, Apple's iPhone and the wide array of devices running Google's Android software.

While Nokia once was a dominant force in the phone business, its star was on the wane when the Windows maker moved in. Phones running Microsoft's software today account for only a tiny fraction of the overall market.

Microsoft won't be turning away from phones completely, though.

"We are focusing our phone efforts where we have differentiation -- with enterprises that value security, manageability and our Continuum capability, and consumers who value the same," Chief Executive Satya Nadella said in a statement. "We will continue to innovate across devices and on our cloud services across all mobile platforms."

It's also possible that the company still plans to introduce a new range of small mobile devices in spring 2017, as previously announced.

Microsoft did not immediately respond to a request for comment.

Meanwhile, watch for Nokia-branded phones to make their way back to the market through the companies that just bought those assets from Microsoft. And this time, they'll be packing Android.