The other shoe has dropped. Following Microsoft’s annual report in August that said it would lay off approximately 2,850 employees globally in the fourth quarter of 2016, the company is closing Skype’s HQ in London as part of the large-scale terminations.
The move means around 400 people will lose their jobs, and as Microsoft told the Financial Times, it “made the decision to unify some engineering positions, potentially putting at risk a number of globally focused Skype and financial roles.” The tech giant also said that it will use a consultation process to help those who were laid off.
The decision comes at a time when the British tech industry is working to show its resiliency following the country’s vote to leave the European Union. Skype was originally founded in London in 2003, and Microsoft purchased it in 2011 for $8.5 billion.
Russ Shaw, founder of industry group Tech London Advocates, and previously the vice president of Skype Emea before Microsoft bought the company, told the Financial Times that he was disappointed by news of the closure.
“Skype is one of Europe’s iconic technology businesses and a genuine ‘unicorn’ with an amazing pedigree of innovation and talent,” he said. “While London is working hard to build a strong base of world-class technology businesses, this decision is a step in the wrong direction.”
The Financial Times also cited an unnamed source who identified as a former Skype employee, as saying they were not surprised by the move, because Skype executives have been leaving the company over the past few years.
“I know it’s natural to integrate, but Skype is a shell of the company it once was,” they said. “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 in Redmond [Microsoft’s HQ]. Now, it’s a Redmond, Microsoft-led company rather than an independent Skype.”