Microsoft Corporation (NASDAQ:MSFT)’s May announcement of laying off 1,350 workers in Finland has been finalized after the conclusion of the co-determination negotiations. The company had noted that slashing off these employees is an outcome of it plans to streamline its smartphone hardware business. The company’s product development in Tampere central southern Finland, as a result, would be shut down. According to STT, Microsoft plans to implement the layoffs soon, and the process of redundancies is expected to be complete by the end of June 2017.
When Microsoft first announced its layoff plan, it created a lot of anxiety with some Finnish politicians accusing the company of breaking promises it had made when it purchased Nokia’s business in 2014. According to the politicians, Microsoft had pledged to inherit about 5,000 former Nokia workers after the $7.2 billion buyout of Nokia.
Microsoft move might be as a result of Windows-powered smartphones only accounting for 1% of global smartphone sales as of May this year. According to Eddie Murphy, a telecoms analyst at Priory Consulting, Microsoft was right in joining the smartphone industry though they were just too late. Alphabet Inc (NASDAQ:GOOGL)’s Android device and Apple Inc. (NASDAQ:AAPL)’s iOS devices have dominated the space with Windows barely making an impact.
One of the primary problems that Microsoft faced is the app gap – a shortage of popular apps for its smartphone. This issue was a major challenge to BlackBerry Ltd (NASDAQ:BBRY)’s BB10 operating system. Microsoft’s has tried to fight the app gap by introducing a common Windows 10 platform that allows apps to work across, desktops, tablets, and mobile. The company also announced a smartphone running Windows 10 that could transform into a desktop PC could transform into a desktop PC.
Murphy noted that recent moves by Microsoft have been as a result of close observation of what Google did with Android. The dominance of Android is because it is open and other companies can use it.