In September 2013, Microsoft surprised many tech pundits when it announced a US$7.2 billion acquisition of Nokia in an attempt to barge its way into the burgeoning smartphone market. The move has proven to be an abject failure with Microsoft recently selling off its Nokia feature phone business and the market share of Windows smartphones dropping below 1% globally, according to recent figures.

Microsoft also booked a US$2.1 billion loss for Q4 of 2015 as a result of its Nokia purchase.

Today, Microsoft announced plans to “streamline” the company's smartphone hardware business, which will affect up to 1850 jobs. As a result, Microsoft will record an impairment and restructuring charge of approximately US$950 million, of which approximately US$200 million will relate to severance payments.

 Microsoft anticipates this will result in the reduction of up to 1350 jobs at Microsoft Mobile Oy in Finland , as well as up to 500 additional jobs globally. Employees working for Microsoft Oy, a separate Microsoft sales subsidiary based in Espoo, are not in scope for the planned reductions.

"We are focusing our phone efforts where we have differentiation – with enterprises that value security, manageability and our Continuum capability, and consumers who value the same," said Satya Nadella , chief executive officer of Microsoft. "We will continue to innovate across devices and on our cloud services across all mobile platforms."

As a result of the action, Microsoft will record a charge in the fourth quarter of fiscal 2016 for the impairment of assets in its More Personal Computing segment, related to these phone decisions.

The actions associated with today's announcement are expected to be substantially complete by the end of the calendar year and fully completed by July 2017, the end of the company's next fiscal year.