Why Microsoft smartphone business is being restructured?

The San Diego layoff will see the departure of 28 senior software development engineers, 18 senior program managers and seven senior hardware engineers, based on a state filing submitted by Microsoft.

The company made 18,000 job cuts past year, most of which were concerning to Nokia deal. “We’ll bring business customers the best management, security and productivity experiences they need; value phone buyers the communications services they want; and Windows fans the flagship devices, they’ll love”, said Satya Nadella in his email to Microsoft employees.

The new announcement comes at a time when last year’s memo, where Nadella had said, “My promise to you is that we will go through this process in the most thoughtful and transparent way possible,” is still fresh in the minds of the employees.

The company is betting that the popularity of Windows on desktop PCs will lead to more apps for the mobile version of Windows and entice more consumers to buy its phones.

AOL previously used Google to power its search engine. Microsoft’s sales lag even those of Windows Phone partners: 8.6 million Lumias (Nokia) moved versus 24.7 million non-Lumias sold. Also, Nadella announced plans to write off $7.6 billion related to its acquisition of Nokia.

Finnish website Yle reported that up to 2,300 jobs will be lost in Finland when Microsoft shutters its Salo operation, the location of Lumia phone manufacturing, and moves functions to its facilities in Tampere and Espoo.

But the bad news for the Nokia legacy doesn’t stop there. The deal was touted as an effort to jumpstart Microsoft’s weak position in a global market dominated by smartphones using rival Google and Apple platforms.

Microsoft had about 118,000 employees worldwide at the end of March, according to its website, with about half in the United States. Microsoft just announced plans to restructure its phone hardware business to better focus and align resources.

In the past few weeks, ex- Nokia CEO Stephen Elop has left Microsoft as has phones boss Jo Harlow so it appears that Microsoft has finally conceded that the smartphone industry is a duopoly.

The cuts indicate that Microsoft will likely focus its mobile efforts on its high-stakes Windows 10 software release, due later this month, rather than on developing smartphones, analysts said.