Microsoft has announced plans to streamline its smartphone business, trimming more than 1,850 jobs mostly in Finland.
Since it bought Nokia's mobile phone activities in 2013, Microsoft has been managing a business in decline.
"We are focusing our phone efforts where we have differentiation", said Microsoft chief executive Satya Nadella.
In an internal memo published on Recode, Microsoft's Windows and Devices head Terry Myerson said the company would continue to support its current line of Lumia and OEM partner devices.
The move will results in $200 million in severance payments, which will be recorded as part of a larger $950 million "impairment and restructuring charge" for accounting purposes.
It's no secret that Microsoft's mobile business has been adrift for years; buying Nokia Devices and Services business in 2014 didn't help matters. However, employees working for Microsoft Oy are not in scope for the planned reductions.
Earlier this month , Microsoft divested its entry-level feature phones business to a Finnish firm HMD Global and Foxconn subsidiary FIH Mobile for $350 million.
More bad news for Microsoft as it announced further cuts to its ailing smartphone business owing to diminishing sales of the devices.
Microsoft is now shorn of nearly all of its 25,000 former Nokia employees, and will only retain a small number in R&D roles.
However, last year it wrote off $7.6 billion last year and cut 7,800 jobs to re-focus its phone efforts, making its total write downs higher than its original cost of acquisition.
Microsoft reported a dip in mobile revenue of 46 per cent in its most recent quarter.
At the time, Windows Phone was flagging, and held just a 3 percent share of the mobile market.
However, the latest news made fans and analysts doubt if Microsoft will continue to attempt to enter the tough competition in the mobile industry, which Samsung and Apple are now dominating.
Source: Microsoft to quit mobile phone design, manufacturing: Finnish newspaper
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