Back in July, Satya Nadella announced worldwide plans to focus on key areas and reduce costs – which would include layoffs.
Now, the biggest factory inherited from Nokia in Brazil, located in Manaus city, is being sold to Flextronics, a Singapore-based company which focus on the production of electronics.
Flextronics will, from the beginning of 2016, be responsible for the national production of Microsoft’s smartphones and Xbox.
In an official statement Microsoft said:
As part of the restructuring of the mobile devices business previously announced, Microsoft has been seeking ways to increase efficiency in operations. After a deep and thorough evaluation, and under the final regulatory approval, Microsoft has decided to sign a contract with our business partner Flextronics for the production of Xbox and smartphones, starting in january 2016. The goal is that Flextronics will keep a similar level of operations in Brazil.
Fundação Nokia and INDT
Despite the stated intent to keep level of operations stable in the factory, two important educational institutions inherited from Nokia are now threatened. Fundação Nokia, an educational foundation created and held by Nokia (and now Microsoft), and sometimes recognized as the best educational institution in the vast center-northern part of Brazil; along with INDT (previously Nokia Institution for Development and now just Institute of Development and Technology); are now worried about Microsoft cancelling their projects. Their financial resources came from the factory’s investments from Microsoft.
Yesterday, some students protested against Microsoft’s administration, drawing other companies and government’s attention to their new situation. Fundação Nokia has already announced they will stop applications for new students for the first semester of 2016. Fortunately the company has also announced that the current students will be able to finish their courses.
That’s really bad news, and we hope that both institutions will find new ways to continue the good work Nokia has started back in decades ago, or that Microsoft itself will do something to keep these projects going. Microsoft has been for decades committed to many social and educational projects in Brazil. The country is a key market for its products, being in the top 5 most important markets for the Redmond company and being the second in number of sold Microsoft smartphones.