By Alexandra Burlacu | Jul 18, 2014 07:58 AM EDT
As expected, Microsoft is making some major layoffs and is looking to turn the Android-powered Nokia X smartphones into Windows Phone-powered Lumia devices.
When rumors first started to emerge about Android-powered smartphones from Nokia, many thought it to be unbelievable. Nokia had dedicated itself to making devices running only Microsoft's Windows Phone platform, but the company nonetheless forged ahead and launched its Nokia X family of smartphones.
Microsoft then completed the acquisition of Nokia's device unit, so it became a matter of time until we saw the Nokia X lineup swallowed up by the Windows giant. Earlier this week news surfaced that Microsoft was about to make the biggest layoffs in its history, in an effort to unify its workforce after it gained all of Nokia's employees as well.
The restructuring is now official, as Microsoft aims to integrate Nokia's devices and services teams into its workforce. In the process, the Nokia X lineup will turn into Windows Phone.
"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," Microsoft CEO Satya Nadella announced on Thursday, July 17.
Nadella further explains that the company will start by cutting the first 13,000 jobs, and most employees who will be laid off will be notified over the next six months. While the company will cut some positions in some areas, it will also add roles in "certain other strategic areas," the CEO notes. Microsoft will offer severance to all employees who will be affected by this change, and help them with their job transition in many locations.
"Second, we are working to integrate the Nokia Devices and Services teams into Microsoft. We will realize the synergies to which we are committed when we announced the acquisition last September. The first-party phone portfolio will align to Microsoft's strategic direction. To win 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."
That success in the affordable smartphone space surely refers to the widely popular Nokia Lumia 520. While that handset doesn't boast any high-end specs and features, it has proved to be the company's best-selling Windows Phone ever, and for the most part it was also the cheapest one. With this in mind, it makes sense that Microsoft wants to continue making "affordable" smartphones.
It will be more interesting to see, however, just what the company will come up with for the "higher price tiers." The Lumia 930 and the Verizon-exclusive Lumia Icon already stirred plenty of waves, and a higher-end Windows Phone powerhouse could significantly boost the platform's relevance.