Microsoft is scaling back its workforce yet again. The company’s London Skype office is to close, with the loss of 400 jobs and further losses possible in its other Skype and Yammer divisions.
Microsoft has pin-pointed its Skype and Yammer divisions as areas that will need to be downsized in the coming year.
According to the Financial Times, most of the office’s 400 staff will be made redundant, closing the headquarters of the company, which was purchased for $8.5bn by Microsoft in 2011.
In response to the news, Microsoft said that it had “made the decision to unify some engineering positions, potentially putting at risk a number of globally focused Skype and Yammer roles”.
It went on to clarify that it is “deeply committed to doing everything we can to help those impacted through the process.”
These redundancies appear to be part of the 2,850 job cuts announced last month, which are due to be completed by the fourth quarter of 2016.
According to employees, the announcement has come as little surprise, given that a number of Skype executives have been departing from the company over the past three years. One employee described Skype as a “shell of the company it once was”.
This particular employee – unnamed by the Financial Times – went on to say that it had become apparent that many of Skype’s business decisions were gradually being shifted to the US, rather than Europe.
‘A step in the wrong direction’
“One of the things that was always a big issue for Microsoft was that big decisions at Skype would usually always be made in Europe, not Richmond.
“Now, it’s a Richmond, Microsoft-led company rather than an independent Skype.”
Reaction in London has not been positive. The British tech industry – including Skype’s former vice president of EMEA, Russ Shaw – is fearful of a mass exit following Brexit.
“This is disappointing,” he said. “Skype is one of Europe’s iconic technology businesses, and a genuine ‘unicorn’ with an amazing pedigree of innovation and talent.”
Now in his current role as the founder of the industry group Tech London Advocates, Shaw added that, “while London is working hard to build a strong base of world-class technology businesses, this decision is a step in the wrong direction.”