Microsoft Fires Another 9,000 ex-Nokia Employees, now in China (expanded)

Microsoft took about 32,000 employees from Nokia (may have been less, not sure now). They fired 12,500 last summer. Now we just heard that Microsoft is closing the big phone factory in Beijing and another facility. Firing 9,000 ex-Nokia employees. They've already dumped two thirds of all the staff they brought from Nokia less than a year ago. Talk about a nasty parent. Why is that clown Elop allowed to continue running Microsoft's hardware division if this is his competence. 




(I visited that factory in Beijing on a Nokia consulting gig some years ago. World's largest - and at the time most modern - handset manufacturing facility. Nokia had 70% market share in smartphones before Elop destroyed that market. This factory was running full steam when Nokia was the most beloved handset brand and Symbian supported Chinese apps and Ovi store was China's leading app store)

How did Nokia collapse in China? This is the picture from before Elop joined Nokia till today:

NOKIA CHINA SMARTPHONE SALES
2009 . . . . . 13.5 million units . . . 80% market share . . . Symbian
2010 . . . . . 23.0 million units . . . 67% market share . . . Symbian . . . . . . . . (Elop hired)
2011 . . . . . 19.5 million units . . . 30% market share . . . Symbian & Meego. . (Elop changes strategy)
2012 . . . . . . 4,5 million units . . . . 4% market share . . . Windows & Symbian
2013 . . . . . . 3.5 milliion units . . . .1.4% market share . . Windows . . . . .. . . (Nokia sale to Microsoft)
2014 . . . . . . 3.0 million units . . . . 0.7% market share . . Windows
Source: TomiAhonen Consulting February 2015
The above data may be freely shared

China was committed to Symbian and MeeGo. Symbian and Ovi were China's bestselling app store. MeeGo's bestselling market was China (N9). Windows didn't support Chinese language and characters when the change was announced. Chinese carriers felt betrayed by broken promises from Nokia, MeeGo was supposed to be the major platform for China Mobile. In 2010 Nokia was the top ranked smartphone brand of China with very strong loyalty. This is how you die. You go against the wishes of your channel and betray your promises to them. This is exactly why Lumia will never succeed because Microsoft is synonymous with broken promises. China today is 32% of the world smartphone market and over 3 times larger than the USA for example. If you take a 67% market share and best brand image and strongest loyatly and biggest app store, and burn that with a memo, resulting two years later in a 4% market share, that is perfection in failure. This was not because of bad phones or a bad OS or production problems or pricing or marketing. This as a corporate suicide arranged by a deranged CEO, the worst CEO in history of any industry. Now that we see that even under Microsoft ownership, the management could not return to success in the world's largest smartphone market, it is clear that Windows Phone is dead globally, and Lumia can never recover. 

My heart goes out to all Chinese ex-Nokia staff who are going to lose their jobs (gosh, its their New Year's vacation - this is like firing someone for Christmas. How cruel are they at Microsoft. Sadists!!!) 

To my ex-Nokia friends in China and all others, don't worry. China is mobile, mobile is China. The mobile industry is growing strongly and you will soon find jobs. Having Nokia on your CV makes you highly desirable for your next employer. Good luck!!!

I know I said more layoffs were coming but still, gosh, this is a punch into the gut. Nine thousand more fired. When will this carnage end? And who is keeping a running tally of all the jobs Elop destroyed? The most destructive memo of all time, yes Burning Platforms indeed. The worst CEO of all time, yes indeed. Elop is synonymous with corporate suicide.

Comments

[AndThisWillBeToo]

I love it how you give the impression you really care. Cheers!

[baron99]

...and people wonder why there is intense dislike of microsoft. This is part of the story that NO ONE WANTS A WINDOWS PHONE! ...except those "all-in" waiting for Moore's law LoL!

[Mickey]

Are you sure they are closing Beijing factory? As far as I remember Nokia had also older factory in China, in Dongguan. And I think it was being phased out from production already before Microsoft deal. Maybe they closed that one, not the much modern one in Beijing? Besides this Beijing factory and whole campus would employ more than 9000 people I think, so there would have to be more headcuts

[Catriona]

Fortunately, China still has a pretty dynamic economy. I'm guessing lots of those employees will be snapped up by the likes of Foxconn and Xiaomi in no time.

[Fieni]

Mickey

Microsoft is actually closing two factories in China: one in Beijing and one in Dongguan.

http://www.marketwatch.com/story/microsoft-to-cut-9000-nokia-jobs-in-china-2015-02-25

[Per "wertigon" Ekström]

Tomi, slightly off topic but what are your thoughts on the recent FCC title II classification vote that went through and basicly now regulates ISPs the same way as telecom companies? It seems like something with the potential to rock the boat in the US markets. :)

[zlutor]

21.5 thousands out of 32k to go - sad to see this... :(
Even if it is justified by low volume of Nokia/Microsoft phones.

That happens when something being micro and soft touches something being hard and ware...

And one of the official reasons is "raising labor costs". In China. In China!!! Gosh.
Remains of production go to Vietnam because it is cheaper. Where does it end?!

Ok, cost efficiency rulez but still...

[ponky]

In the 90's people I was privy to general managers from some of the biggest companies meeting to discuss labour price strategies, and they all voiced one thing, that the supply of ever cheaper labour in the world would not run out in their lifetime. So onward and upward wiping out jobs in developed countries and building factories in 3rd world countries and getting subsidies for it. Talk about self interested arseholes getting a bonus for self interested activities screwing the worker. geez.

[Spawn]

How the story ends? Well, soon there will be only one Lumina-employee left; Elop. Then, and only then, he finally succeeded in jumping off that burning platform into his own boat filled with millions of cash for him and him only.

A classic gangster epos where the last man standing gets all the profits. To rob his $20 million he just had to kill 50k competitors/jobs. And the sad end is it worked, cops didn't arrest him (yet?) and hes holding the gold in his hands.

[Lullz]

@Spawn

"To rob his $20 million he just had to kill 50k competitors/jobs. And the sad end is it worked, cops didn't arrest him (yet?) and hes holding the gold in his hands."

Baron95 makes a good point. How effective is it today if the company has all those factories and lots of facilities for in-house manufacturing process? Apple doesn't need those and they are doing fine.

[Catriona]

@Lullz, that's exactly right. China leads the world in contract manufacturing capabilities. Apple is obviously one of the largest and most successful examples of a company relying on contract manufacturing, but it is certainly not alone. There is obviously some risk (such as financing a future competitor the way Apple did with Samsung), but Apple has shown it is not necessary to be vertically integrated as a corporate entity in order to succeed.

[zlutor]

@Baron95: having your own factories has positive and negative side. I'm not dare enough the state what is the significant in general...

Especially when a company has to deliver in such volume that its own factories are working 24/7 like Nokia did in its gold time. In this case I hardly see any disadvantage of own factories. Of course, when volume is low and some of them gets idle...

Of course, having nothing real but design only makes you really flexible - but vulnerable, too - if competition is fierce and you have to fight for capacity...

I think there is no absolute truth here. E.g. Intel has its own factories - and it declares want to have them - while others has nothing. Some of therm are successful while others struggling...