Microsoft to close Skype's London office

September 19, 2016 | 09:31

Tags: #financial #im #instant-messaging #layoff #layoffs #london #niklas-zennstrom #skype #voip

Companies: #ebay #microsoft

Microsoft has confirmed that it is to close the London office of its Skype communications subsidiary, with the loss of around 400 jobs.

Skype was founded in 2003 by Niklas Zennström and Janus Friis, in partnership with Ahti Heinla, Priit Kasesalu, and Jaan Tallinn, using back-end technology shared by notorious file-sharing service Kazaa. Unlike Kazaa, though, Skype used the technology for less questionable tasks: instant-messaging, voice-over-ip (VoIP), and video chat. Just two years after its initial launch, in 2005, Skype was acquired by auction site eBay in a $2.6 billion deal. A short-lived plan to add 'contact seller' buttons to auctions later, though, eBay had found little benefit from its acquisition and would sell 65 percent of its share of the company in 2009 to an investment group for $1.9 billion before Microsoft stepped in in 2011 and snapped up the company for a whopping $8.5 billion.

Under Microsoft, Skype's original Kazaa-like peer-to-peer and client-server infrastructure has been abandoned in favour of a pure client-server model communicating with Microsoft-owned supernodes. It has supplanted Microsoft's own communications packages, including MSN Messenger, and forms a key part of the company's plan for business and personal communications - but that does not, it seems, extend to keeping the lights on in Skype's London office.

Microsoft confirmed to the Financial Times that it was to close Skype's London office immediately, with the loss of around 400 jobs. In a statement to the paper, a Microsoft spokesperson claimed the company had 'made the decision to unify some engineering positions, potentially putting at risk a number of globally focused Skype and Yammer roles,' and that it was 'deeply committed to doing everything we can to help those impacted through the process' including a planned consultation process for those affected.

Former employees speaking to the paper suggested the closure had been long coming with key executives having left the company over the last three years and Microsoft taking a more direct role in Skype's leadership. One unnamed former employee claimed that in the previous years the company had shifted to become 'a Redmond, Microsoft-led company rather than an independent Skype.'

The closure of the Skype office in London forms part of a planned 2,850-strong layoff programme announced by Microsoft in its annual financial report last month, the remainder of which will be completed by the end of the year.
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