Microsoft Slashes Jobs In Mobile Division, Partners Say Focus On Enterprise Security, Manageability Is Key

Microsoft Wednesday said it will write off $950 million and cut 1,850 jobs as a stepping stone to ’streamline’ its smartphone hardware business to focus on enterprises and niche areas.

’We are focusing our phone efforts where we have differentiation … with enterprises that value security, manageability and our Continuum capability, and consumers who value the same,’ said Microsoft CEO Satya Nadella, in a statement. ’We will continue to innovate across devices and on our cloud services across all mobile platforms.’

Microsoft said the job cuts include 1,350 jobs at Microsoft Mobile Oy in Finland and 500 additional jobs globally.

[Related: Partners Question Future Of Windows Phone After Microsoft Offloads Nokia Feature-Phone Business]

The restructuring and job cuts mark another way of Microsoft undoing a portion of its 2014 acquisition of Nokia’s phone business and refocusing its efforts in the mobile sphere.

For partners like Ric Opal, vice president at Peters & Associates, a Microsoft partner in Oakbrook Terrace, Ill., continuing to focus on that differentiation around security and manageability, regardless of the hardware, is critical for Microsoft's mobile platforms, particularly for enterprises.

’What’s important to me is the Microsoft experience,’ he said. ’It's all in the strategy about how Microsoft will mesh their enterprise Windows experience on mobile.’

Last year, Microsoft wrote off $7.6 billion and cut 7,800 jobs as part of a refocusing of its phone efforts. Last week, Microsoft said it will sell its feature phone business to FIH Mobile, which is a subsidiary of Foxconn, as well as HMD Global, for $350 million, according to a statement.

Microsoft, Redmond, Wash., said it will continue to develop Windows 10 Mobile and support Lumia phones, including the Lumia 650, Lumia 950 and Lumia 950 XL, as well as phones from OEM partners such as Acer and HP Inc.

Robby Hill, CEO of Florence, S.C.-based HillSouth, a Microsoft partner, said it is critical for Microsoft to turn its efforts to mobile platforms, as opposed to focusing merely on the hardware.

’All efforts should be focused on supporting mobile platforms ... for as many features and functions as they can deliver,’ he said. ’From a partner perspective, I don’t understand Microsoft’s reluctance to admit that their Windows Mobile strategy has failed to gain traction.’

According to a report released by Gartner in May, Windows Phone OS only took 0.7 percent market share of the smartphone sales to end users in the first quarter of 2016, lagging behind iOS and Android.

’I think Microsoft is looking at what’s the future with their mobile business … it’s hard to compete in that space with Apple and Samsung leaving Microsoft in a hard distant third,’ said Michael Goldstein, president and CEO of LAN Infotech, a Fort Lauderdale, Fla.-based Microsoft partner.