Microsoft to lay off 12,500 staff and shift some Nokia X designs to Lumia range

The release of the Android Nokia X range just prior to the purchase of the company by Microsoft, left many people asking what the future of the Nokia X series was. With the launch of the Nokia X2 range late last month after the purchase had gone through it seemed the series could stick around. But overnight, new Microsoft CEO Satya Nadella has overnight sent a letter to staff outlining some future plans for the Nokia X series and also some news about the future of some of the staff.

The Microsoft team will lose a total of 18,000 staff overall. 12,500 of those staff would come from the newly merged Nokia Devices and Services section. Job losses within the Nokia team will come from both the professional and factory workers. All employees affected by the cuts will receive a severance package as well as job transition help, something anyone who has been through redundancy will appreciate.

On the Nokia X side of things, if you were hoping for further Android devices, there’s not much hope. Satya Nadella has shown that he will be focusing Microsoft on Windows Universal Apps saying :

The Nokia X, wasn’t our ideal of what Android could possibly be. There was definitely some flair from Nokia in things such as bold design on the hardware, as well as interesting software choices – Fastlane – but it was something that is obviously not to be.

There will be a Q&A session for Microsoft staff Friday US time. You can check out the full text of the letter below.

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Last week in my email to you I synthesized our strategic direction as a productivity and platform company. Having a clear focus is the start of the journey, not the end. The more difficult steps are creating the organization and culture to bring our ambitions to life. Today I’ll share more on how we’re moving forward. On July 22, during our public earnings call, I’ll share further specifics on where we are focusing our innovation investments.

The first step to building the right organization for our ambitions is to realign our workforce. With this in mind, we will begin to reduce the size of our overall workforce by up to 18,000 jobs in the next year. Of that total, our work toward synergies and strategic alignment on Nokia Devices and Services is expected to account for about 12,500 jobs, comprising both professional and factory workers. We are moving now to start reducing the first 13,000 positions, and the vast majority of employees whose jobs will be eliminated will be notified over the next six months. It’s important to note that while we are eliminating roles in some areas, we are adding roles in certain other strategic areas. My promise to you is that we will go through this process in the most thoughtful and transparent way possible. We will offer severance to all employees impacted by these changes, as well as job transition help in many locations, and everyone can expect to be treated with the respect they deserve for their contributions to this company.

Later today your Senior Leadership Team member will share more on what to expect in your organization. Our workforce reductions are mainly driven by two outcomes: work simplification as well as Nokia Devices and Services integration synergies and strategic alignment.

First, we will simplify the way we work to drive greater accountability, become more agile and move faster. As part of modernizing our engineering processes the expectations we have from each of our disciplines will change. In addition, we plan to have fewer layers of management, both top down and sideways, to accelerate the flow of information and decision making. This includes flattening organizations and increasing the span of control of people managers. In addition, our business processes and support models will be more lean and efficient with greater trust between teams. The overall result of these changes will be more productive, impactful teams across Microsoft. These changes will affect both the Microsoft workforce and our vendor staff. Each organization is starting at different points and moving at different paces.

Second, we are working to integrate the Nokia Devices and Services teams into Microsoft. We will realize the synergies to which we committed when we announced the acquisition last September. The first-party phone portfolio will align to Microsoft’s strategic direction. To win in the higher price tiers, we will focus on breakthrough innovation that expresses and enlivens Microsoft’s digital work and digital life experiences. In addition, we plan to shift select Nokia X product designs to become Lumia products running Windows. This builds on our success in the affordable smartphone space and aligns with our focus on Windows Universal Apps.

Making these decisions to change are difficult, but necessary. I want to invite you to my monthly Q&A event tomorrow. I hope you can join, and I hope you will ask any question that’s on your mind. Thank you for your support as we start to take steps forward in evolving our organization and culture.

Satya

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