Closing down factories is no easy task in China, where workers have been known to take managers hostage in order to negotiate a better severance package. Microsoft tried a different tactic with the employees of a Beijing factory that it’s shutting down, as part of the 18,000 layoffs it is carrying out across the former Nokia handset business: A parting gift of the smartphone the workers will no longer be making.
The first 300 workers who volunteered to leave quietly received a Lumia 630 phone (retail price 999 yuan, or about $160), according to a report by the Chinese newspaper First Financial Daily (link in Chinese). The factory once had 2,000 R&D staff and 3,000 factory workers; only 300 will keep their jobs. Hundreds of employees protested at the facility last week, shouting slogans against “Microsoft’s hostile takeover and violent layoffs.”
A Nokia China staff member told the paper that Microsoft “never mentioned the word ‘layoff,’ but encouraged the employees to ‘sever their labor relations.’” One worker said: “Before July 30, people were still waiting to see what to do. But after the phone rewarding came out, we were so disappointed. After August 1, more people are signing the leaving contracts.”
Microsoft is currently under investigation for antitrust violations by Chinese regulators. Microsoft’s Windows Phone operating system is a distant third in China’s smartphone market, behind Apple’s iOS and Google’s Android, which controls about 85% of the market.