At last, Microsoft Corporation To Sell Nokia Plant In Brazil

Microsoft continues global cost-cutting exercise with sale of its largest manufacturing plant in Brazil

I knew this would happen someday, Microsoft Corporation has embarked on a global exercise to cut costs. The latest measure in this vein, is the sale of the company's biggest manufacturing plant in Brazil, to supply chain company; Flextronics. The move follows Microsoft's decision to shut down unneeded assets all around the globe in order to reduce cost. Since it took over Nokia, Microsoft has shut down everything that could help reduce overheads. This is a part of a restructuring effort, and is similar to the plant shutdown which happened in China in February of this year, as well as the shutdown of a facility in Finland. There is also news that the company shall phase out the Nokia name from the products, completely.


There is a shroud of hope however in this fiasco as Flextronics manufactures devices. This means that people will retain their jobs and that there won’t be a need for massive layoffs, as Microsoft has signed a contract with Flextronics to build all Xbox consoles and Lumia smartphones, for the local market. This can be seen as a win-win situation, as not only does this help the local economy, it also allows the workers to continue to earn their livelihoods.
As part of the restructuring of the mobile devices business previously announced, Microsoft continues to seek ways to increase efficiency in operations. An official statement reveals that; “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.”

This clearly shows that intense thought has gone in to the restructuring of the plant, and the public image that would result from a decision to cut thousands of jobs. However, it is good to see that it has decided to retain the plant, and this plant can also be the lead manufacturing hub for the company, in South America. This can help enhance the company’s sale in the region as well as allow Microsoft to sell the under performing Lumia and Xbox One, and increase sales locally.
The move is also bound to soften the company's image which has suffered ever since it started lay offs to bring down cost. The latest decision should help improve the company's image and build a perception that Microsoft continues to make efforts to save as many jobs as possible.
It will be interesting to see where Microsoft goes from here. The company has tried extremely hard to bring back Nokia to the forefront of the smartphone market, and rebranding it might just be the smartest option. It will be interesting to see whether it shuts down any other plants. Nokia has slowly deteriorated and the best available option right now is to rebrand the smartphones giant in the hopes that it may be revived to fulfill the potential it had in the early days after its inception.