Microsoft Corps biggest reduction in company history could cost China more than 1,000 jobs,analysts warned on Friday.They also fear new CEO Satya Nadellas massive downsizing plan -which will focus on thedevice-making segment -may not work well in China, the worlds largest smartphone producerand buyer.Microsoft announced on Thursday plans to lay off as many as 18,000 employees globally in thenext year as it tries to absorb the handset group recently acquired from Nokia Oyj and squeezeoperating costs in other units.The United States software giant refused to discuss reduction plans for China.Charlie Dai, principal consulting analyst at consultancy firmForrester Research Inc,said Microsoft may eliminate at least1,000 jobs in the country, including research, marketing andsales.The development team Microsoft inherited from Nokia inChina is not its core asset. Every segment that is not close tothe companys cloud strategy can be treated as legitimateslim-down target at this moment, said Dai.Stephen Elop, former Nokia CEO who currently headsMicrosofts devices group, said in an open letter that thecompany plans to reduce its engineering team in Beijing.The team will have supporting roles including affordabledevices.Elop also said Microsoft is moving major smartphoneproduction to Hanoi, leaving some production in Beijingand Dongguan in southern China.My colleges and I are extremely upset about the upcomingjob cuts, said a Microsoft employee under the condition of anonymity.Microsoft launches Surface Pro 3in New York Microsoft to offer Windows for freeon phones, tablets Rumors are going around now. Many say hundreds will be axed while some versions have a farbigger number, the employee said.Analysts argued cutting loose with China in smartphone design and manufacturing does notbenefit Microsoft, as it aims to become a mobile company similar to Google Inc.China is the biggest phone market in the world, it is important to understand the localrequirements for Microsofts future product development, said Kitty Fok, managing director ofresearch company IDC China.Another important factor for Microsoft to consider keeping research and production in China is arecent government decision to support local integrated circuit providers, Fok said. Integratedcircuit making is a critical upstream industry for smartphones.China shipped 220 million mobile phones in the first half of this year, with overseas brands takingaround one-third of the market share, according to data from the China Academy ofTelecommunication Research and Beijing company Analysys International.Samsung Electronics Co and Apple Inc are the majorforeign-brand smartphone vendors in the country whileMicosofts Nokia only accounts for around 3 percent of themarket.Nicole Peng, research director of Canalys China in Shanghaisaid the operation workforce of Nokia in China is alreadyvery lean after job cuts in 2012. The exact number of jobs lostis unknown because the company does not break down thefigure by region.Microsoft launches Surface Pro 3in New York Microsoft to offer Windows for freeon phones, tablets The decision to axe Nokia X and Android-based phoneteams would have significant impact over Microsofts devicestrategy in China, Peng said.Smartphones powered by Windows operating systems arenot popular in China. More than 90 percent of the devicessold in the nation are installed with Android or iOS operatingsystems, according to the China Academy ofTelecommunication Research.Analysts agreed employees in Microsoft Chinas cloud service and Xbox gaming console aremost likely to survive the layoff while staff members in traditional businesses could be cut.I think the Finland operation will take the hardest hit globally and the Chineseteams in charge offeature phone and Android phone projects are mostly likelyto be cut, said Peng.