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Microsoft Kills Nokia X, Plans Big Job Cuts for Former Nokia Units

Thu, 07/17/2014 - 10:13am
Ben Munson

Microsoft is putting an end to its fledgling Android-based Nokia X line and targeting its Lumia brand toward the low-cost smartphone market.

The strategy shift is happening in hopes that Microsoft can grow Windows Phone share by focusing the OS in more affordable smartphone segments. In an email to Microsoft employees, Devices Group Vice President Stephen Elop said the change will result in substantial job cuts in the Nokia group.

“Whereas the hardware business of phones within Nokia was an end unto itself, within Microsoft all our devices are intended to embody the finest of Microsoft’s digital work and digital life experiences, while accruing value to Microsoft’s overall strategy. Our device strategy must reflect Microsoft’s strategy and must be accomplished within an appropriate financial envelope. Therefore, we plan to make some changes,” Elop wrote in the email.

Over the next year, Elop said 12,500 factory and professional employees within the Nokia unit will lose their jobs. The losses at Nokia are part of the 18,000 company-wide layoffs Microsoft anticipates over the next year.

After Microsoft acquired Nokia’s handset business, its global workforce grew from 99,000 to 127,000.

Microsoft will consolidate its former Smart Devices and Mobile Phones business units and Executive Vice President Jo Harlow will run the newly combined business. The downsized team will continue to sell and support existing Nokia X smartphones but the select future Nokia X designs Microsoft keeps will be shifted over to Lumia.

Microsoft announced the Nokias X, X+ and XL in February at Mobile World Congress in Barcelona. Based on the Android Open Source Project, the trio of dual-SIM smartphones started at just $122. The modified OS on the devices maintained the look and feel of Windows Phone while opening up a custom storefront of curated Android applications.

In April, Microsoft finalized its $7.5 billion deal for Nokia’s devices and services business.

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