"Microsoft Corp. on Wednesday announced plans to streamline the company's smartphone hardware business, which will impact up to 1,850 jobs," it said in a statement, adding 1,350 of those jobs would be eliminated in Finland where its smartphones have been designed. The other 500 jobs will be cut "globally".
Microsoft's chief shop steward in Finland, Kalle Kiili, told AFP the decision means Microsoft will no longer design or manufacture phones.
Microsoft "will not be manufacturing (phone) devices, at least for the time being. It will do software, however," Kiili said.
Microsoft said the move would result in "an impairment and restructuring charge of approximately $950 million" (EUR 852.6 million or roughly Rs. 6,398 crores) for the company.
The decision means Microsoft scraps what was left in Finland of Nokia's former glory as the world's former top mobile phone maker.
Nokia was the world's leading mobile phone maker from 1998 until 2011 when it bet on Microsoft's Windows mobile platform which proved to be a flop.
The Finnish company sold its unprofitable handset unit in 2014 for some $7.2 billion (roughly Rs. 48,493 crores) to Microsoft, which is closing the entire unit.
Nearly 2.4 million Windows Phones were sold in the latest quarter, around 0.7 percent market share overall. That's a decrease from the 2.5 percent market share of Windows Phone during the first quarter of 2015, according to the US-based analyst group, Gartner Inc.
A week ago Microsoft announced the sale of its feature phone business for $350 million (EUR 310.5 million) to a new Finnish company HMD Global and its Taiwanese partner, FIH Mobile of Foxconn Technology Group, which will jointly begin manufacturing handsets and tablets under the Nokia brand again.
Microsoft had called up all its employees in Finland to hear the news which Kiili said left the crowd "silent".
"We had rumours that something would happen but not that everything would go," he described.
Employees at Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, Finland, would not be affected by the job cuts.