Microsoft To Close Down Skype Office In London; Preferred Operations In Seattle?

The software giant will close Skype office in London in a near future, and 400 people to be laid off, as Microsoft will move the operation to its headquarter in Seattle. Skype's products and services will be aligned and integrated to Microsoft corporate strategy.

The plan to shut down Skype's London office is first reported by Financial Times. Microsoft said the decision was to unify the development operation, therefore many people in Skype and Yammers are deeply affected by the decision as there are many redundant jobs. "We are deeply committed to doing everything we can to help those impacted through the process," Microsoft said.

Many people regretted the decision, as Skype is considered as "one of the iconic technology businesses and a genuine unicorn in Europe," as former vice president of Skype Russ Shaw said. However, Skype is constantly under increasing threat from many similar service, especially WhatsApp and Facebook Messenger as reported by The Verge.

While in the enterprise service, Slack has become its major competitor and slowly gaining the market share. Skype was founded in 2003 by Janus Friis and Niklas Zennström, two Danish and Swedish engineers to provide peer-to-peer communication service. Its core technology was developed by trio Ahti Heinla, Priit Kasesalu, and Jaan Tallinn. Microsoft acquired the company in 2011 for a $8.5 billion.

Following Skype's acquisition, Microsoft made a lot of work to integrate Skype with is Office productivity suite, as Tech Crunch reported. Microsoft tries hard to polish Skype and introducing features to enable Skype to compete against Slack in the enterprise market.

Microsoft is know to acquire companies to strengthen and expand its business. While the company is also known to shutdown some of the companies it acquired annd integrate them into Microsoft business. Finland's mobile phone maker Nokia is one of the example.

In its annual report last month, Microsoft announce to terminate 2,850 jobs globally in the fourth quarter of 2016. Skype's London office is the first batch of that number.