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Sailfish OS creator Jolla will restructure debt, cut half its workforce

After the loss of Nokia’s mobile division, ex-MeeGo developers founded Jolla as a replacement Finnish mobile company. Unfortunately, after four years in business, Jolla has now filed for debt restructuring, with plans to halve its workforce.

Jolla claims that it will continue to push into the commercial market with Sailfish OS, its flagship mobile platform. A few commercial and security vendors are apparently interested in licensing the platform, which first appeared on the Jolla smartphone in 2013.

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“Our operating system Sailfish OS is in great shape currently and it is commercially ready,” said Antti Saarnio, co-founder of Jolla, in a statement. “Unfortunately the development until this point has required quite a lot of time and money. To get out of this death valley we need to move from a development phase into a growth phase.”

Earlier in the year, Jolla announced plans to spin-off hardware operations into a separate company. Since the split, the company has been focused primarily on building Sailfish OS for commercial, enterprise, and emerging markets that want an alternative to Android.

That has pushed Jolla away from the consumer market, although the Finnish company never made it over one percent with Sailfish OS. The company has two hardware products, a self-titled smartphone and tablet, both recently updated with Sailfish OS 2.0.

Jolla did not comment on what operation would see the most cuts, but hardware seems to be a lower priority than the Sailfish OS, which Saarnio describes as a “valuable asset and worth fighting for.”

”In Finland we have very good laws for corporate restructuring,” said Saarnio. “These enable the continuation of businesses through debt restructuring, which gives a company more time to take care of its financial liabilities.”

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Finland will provide financial aid to Jolla until it can recover from its present state. The company currently employs around 200 developers and engineers according to its LinkedIn page, and expects to cut that in half by the end of the year.

This is another case of a hardware startup failing to make it in an extremely tough market. Jolla, like many other companies, is now looking to the more promising enterprise market, where it might be able to win contracts from ex-Android and BlackBerry customers.