Rumor: Microsoft closes Finnish research department for cheap phones

Microsoft would like to close a research department in Finland that is working on low-cost phones. That is what a usually reliable Finnish newspaper writes on the basis of anonymous sources. Microsoft declined to comment on the rumor.

The research department is working on cheap phones for the former Nokia, which is now called Microsoft Devices, reports the Finnish newspaper Helsingin Sanomat. The department is located in the northern Finnish city of Oulu, where Nokia once worked with 5,000 people on R&D for new devices, but Microsoft now employs 500 people there after various reorganizations in recent years.

Closing the research department in Oulu is part of a plan to lay off 1,000 people in Finland, according to the newspaper. That is more than 20 percent of the total number of people employed by Microsoft in Finland. The Redmond giant has 4,700 Finnish employees.

This week there are more rumors of an imminent reorganization at Microsoft at the initiative of new CEO Satya Nadella. Microsoft has not denied those rumors, something that almost always happens with such rumors, because they can cause unrest among employees. Nadella will give a keynote address Wednesday afternoon at Microsoft’s Worldwide Partner Conference, but in it he will probably only talk about his vision for Microsoft and not about the consequences for the company, including the suspected layoff.

The Microsoft building in Oulu. Photo: Helsingin Sanomat