Microsoft to shut London Skype office putting 220 jobs at risk

Tech giant Microsoft is set to close the London office of its Skype subsidiary with the potential loss of 220 jobs.

The company said it was consolidating its London offices and moving workers to a new site in Paddington.

"Microsoft reviewed some London-based roles and made the decision to unify some engineering positions," it said.

The move will potentially put at risk a number of "globally-focused" roles at Skype and Yammer, it added.

Skype was founded in London in 2003 and snapped up by Microsoft in 2011 for $8.5bn (£6.5bn).

In July, Microsoft said it would be scrapping 2,850 jobs across its business in the fourth quarter of 2016, although it is yet to say when the London Skype office will close.

"Microsoft will be entering into a consultation process and offer new opportunities, where possible," the company said.

"We are deeply committed to doing everything we can to help those impacted through this process."

On the face of it, the closure of Skype's London office says more about Microsoft's problems in managing the business since the takeover than about the UK's attractiveness as a location.

But it is also further evidence that ownership matters. Skype was an Estonian company but founded and rooted firmly in London, and when Microsoft swooped it was assumed that this would continue to be where its future was shaped.

Now it's facing strong headwinds, failing to establish itself as the prime means of business communications, and Microsoft is cutting costs.

If the firm was still controlled from London, the axe might have fallen elsewhere - but with key decisions being made far away in Seattle, there was no room for sentiment about Skype's history.

Foreign buyers always make positive noises about boosting jobs and investment - but sometimes those promises are hard to keep.

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