Nokia smartphones are photographed with the Nokia logo on the background. (Photo : Reuters)
No thanks to smartphones, Nokia's downward spiral continues, failing to regain its number position in the market. When Microsoft bought Swedish firm Nokia in 2013, hopes were high in the industry and employees of the handset maker that it would be able to recover from weak sales of its pre-Android and -iOS units.
Hopes continue to shatter as Microsoft Chief Executive Satya Nadella, in an email announcement to workers, said that 7,800 Nokia staff would join the ranks of the unemployed in the coming months. In 2014, 18,000 Nokia workers from its phone unit were laid off that by March, 118,000 Nokia employees had lost their jobs across the globe, reports Christian Science Monitor.
The series of layoffs and a $7.6 billion impairment charge that Microsoft will take linked to its $7.2-billion acquisition two years ago of Nokia confirm the warning made by tech experts and Wall Street analysts that the software giant has no business foraying into the smartphone world.
One analyst, Sam Gustin, wrote in Time that Google and Apple's dominance in the smartphone market makes Microsoft's "gambit ... too little, too late." Microsoft initially maintained the brand name Lumia, which Nokia used for its smartphones released in 2011, when it released in November 2014 the Microsoft Lumia 535.
To disprove the "pessimists," Microsoft added in April 2014 25,000 Nokia workers to Microsoft payroll. However, with the job axe heavily wielded twice, it is unclear if any of those 25,000 are still Microsoft employees now.
Ex-Nokia officials' advice to Microsoft is for Nokia to leave the smartphone market to the current leaders and instead concentrate its distribution and sales efforts in Africa and emerging nations where having an analog phone is still a source of happiness. Microsoft actually first released the Lumia 535 in India.
Despite the increase in Lumia sales due to Microsoft's recent decision to concentrate on the low-end market, The Verge notes that the company's overall market share actually went down because sales of Android- and iOS-powered smartphones grew quicker.
Nadella has assured that Microsoft would not kill off fully the Lumia line, although for Nokia employees who received the email on Wednesday, the lights on their future just became dimmer.
