Microsoft will close Skype’s London office as part of its efforts to consolidate its presence in the United Kingdom.
The decision to close the office puts 220 positions at risk, Microsoft said. Skype was originally founded in London, and about 400 people work out of the London office, according to The Financial Times, which first reported on the office closure. Several Skype executives have left the company over the last three years, and Microsoft has wielded more influence over key decisions, according to former employees interviewed by the Times. One former employee told the Financial Times: “I know it’s natural to integrate, but Skype is a shell of the company it once was.”
Microsoft issued a statement confirming the decision to close the Skype office. The company said the move is meant to cut real estate costs in London, where office space is pricey.
Microsoft said the decision to close Skype’s London office had nothing to do with Britain’s shocking vote to leave the European Union over the summer. The Redmond, Wash. tech giant’s U.K. presence dates back to 1982. According to its website, Microsoft has more than 3,000 employees there. Here’s the full statement from Microsoft:
Microsoft is consolidating offices across London, moving employees to Microsoft’s new office at Paddington. As a result, Microsoft conducted a review of some roles based in London, making the difficult decision to unify some engineering positions, potentially putting at risk approximately 220 globally focused Skype and Yammer roles.
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.
Earlier this year, Microsoft UK moved into new offices at Kingdom Street – Paddington, London. With additional space available at the Paddington office and the premium price of London property, Microsoft has made the prudent financial decision to consolidate offices in London.
Microsoft acquired Skype in 2011 for $8.5 billion. The move has generally been considered one of its more successful acquisitions. Over the years, Microsoft has added new features to Skype and sought to get it on as many devices as possible in a bid to stand out from an increasingly large field of competitors.
Microsoft announced the elimination of 1,850 positions in May, and then two months later in a regulatory filing reported “approximately 2,850 roles globally will be reduced during the year as an extension of the earlier plan.”
Update: A Microsoft representative said that the potential layoffs related to the Skype office closing would be part of the previously announced 2,850 job cuts.