Chinese site VTech claims that Microsoft is thinking of reforming its internal mobile division and lay off half of the staff. Microsoft has only sold only 15 million handsets in Q1 2016, has rights to the brand for feature phones up to 2024.

There have been no new devices until October, when Microsoft produced three Lumias that run Windows 10 Mobile, the Lumia 550, 950, and 950 XL. In February, the Lumia 650 was announced, which was reportedly the last Lumia.

Microsoft appears to have tried to integrate the mobile division into the Surface unit, but the VTech rumour suggest that after closing its feature phone group, the remaining part of Microsoft Mobile (which produces Lumia handsets) will be folded into the Surface group.

This will leave the Surface Phone as the only device manufactured by Microsoft. Since Nokia’s sale to Microsoft in 2014, the division has suffered more than 18,000 losses.

Microsoft makes more cash by licensing its Android patents rather than selling its Windows Phones. With its own mobile hardware now being scaled back, the company has been stressing on their third party OEM business and focusing on the business and enterprise segment for Windows Mobile delivery.

With the Surface Phone expected to be launched in early 2017 it will be interesting to see what happens.

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