The company said it plans to restructure the company’s phone hardware business “to better focus and align resources.”

The plans were outlined in an email from Microsoft CEO Satya Nadella to Microsoft employees.

"We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family," Nadella said. "In the near-term, we'll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility."

The plan is expected to be mostly complete by the end of the calendar year and fully completed by the end of the company's fiscal year.