Microsoft is to shut the London headquarters and offices of Skype, the video chat and voice-call services company it had acquired in 2011 for $8.5bn (£6.54bn). The American tech giant will make most of Skype's 400 staff in the UK capital redundant.
The Washington-headquartered company said it had made the call in an effort to "unify some engineering positions". It added that this would put at risk "a number of globally focused" roles in Skype and one other company of its called Yammer, which provides enterprise social networking service.
"We are deeply committed to doing everything we can to help those impacted through this process. Microsoft will be entering into a consultation process and offer new opportunities, where possible," a Microsoft spokesman said.
According to the Financial Times, this move by the tech giant comes at a time when the British tech industry is trying to indicate that it is growing and open for business despite the Brexit vote. It follows recent reports where this industry has claimed that as of June, the UK was hosting 18 of Europe's 47 unicorns — tech firms that are valued at more than $1bn.
Commenting on the closure news, Russ Shaw, former vice president at Skype said the move was disappointing. "Skype is one of Europe's iconic technology businesses and a genuine 'unicorn' with an amazing pedigree of innovation and talent...While London is working hard to build a strong base of world-class technology businesses, this decision is a step in the wrong direction."
An unnamed former employee commented that he was not surprised by the move as many Skype employees had been moving out of the company quietly over the past three years. "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. Now, it's a Redmond, Microsoft-led company rather than an independent Skype," the person added.
This is not the first time that Microsoft has acquired a company and dismantled it. Past examples include Nokia's handset division and advertising metrics company aQuantive.
This follows Microsoft's annual report released in August saying that the tech giant would make 2,850 jobs redundant worldwide in the fourth quarter of 2016. A small fraction of this will be from the current move.