After pioneering the market for internet-based calls 23 years ago, Skype is now shutting down. Microsoft, which acquired the messaging and calling app 14 years ago, has announced that it will be retiring Skype from active service on May 5 to prioritize Teams. Skype users have a 10-week window to decide how they want to handle their accounts.
It remains unclear how many users will be affected. The most recent figures shared by Microsoft in 2023 indicated that Skype had more than 36 million users, a sharp decline from its peak of 300 million users.
“We understand that this is a significant change for our Skype users, and we deeply appreciate their support over the years,” said Jeff Teper, President of Microsoft 365 Collaborative Apps and Platforms, in an interview with TechCrunch. “At this stage, consolidating our efforts into Teams allows us to simplify our message and drive innovation more efficiently.”
Between now and May 5, users will have the option to transfer all their contacts and chat history to Microsoft Teams. Alternatively, they can download their Skype data using the built-in export tool.
The business case This announcement may not come as a surprise to those who have followed Skype’s trajectory in recent years. In many ways, its decline became apparent in 2016, when Microsoft introduced Teams.
Although Microsoft launched a dedicated Skype for Business product in 2015, the arrival of Teams marked a strategic shift in the company’s approach to cloud communications. Initially likened to a Slack alternative, Teams was designed to facilitate collaboration across various Microsoft and third-party applications, encompassing video and text communication—areas that overlapped directly with Skype.
By 2017, Microsoft had unveiled plans to phase out Skype for Business, a process completed by 2021. That same year, Microsoft made Teams the default communications app on Windows 11, further pushing Skype into obscurity.
Fast-forward to December 2024, TechCrunch reported that Microsoft had disabled the ability for Skype users to add credit or purchase Skype phone numbers, encouraging users to switch to monthly subscriptions and Skype-to-phone plans instead.
This latest development marks the end of a brand and company that was one of the pioneering European tech startups from the dial-up era.
Skype’s phase-out follows two years after Microsoft introduced a fully restructured Teams desktop and web application. Over this period, Teper noted that consumer calling minutes on Teams had increased fourfold, though he did not disclose the proportion of personal users among the platform’s 320 million total users.
“The scale of Teams for personal use has reached a level where we feel very confident in the app,” Teper stated. “We have observed strong consumer adoption, and after careful consideration, we believe the time is right for this transition.”
Microsoft is convinced that consumers are ready for the change.
User numbers Skype was instrumental in revolutionizing internet communication, initially focusing on voice calls before expanding into video and file sharing. However, the emergence of smartphones and newer messaging platforms significantly impacted its user base. By comparison, WhatsApp surpassed 2 billion users in 2020.
When Skype filed for an IPO in 2010, it reported 560 million registered users and 124 million monthly active users. However, instead of going public after its split from eBay—which had acquired Skype in 2005—Microsoft made an $8.5 billion acquisition bid in 2011, subsequently growing the platform to a peak of 300 million users in 2013.
In the years that followed, Microsoft rarely disclosed Skype’s user numbers. However, during the COVID-19 pandemic in March 2020, the company revealed that Skype’s daily users had surged 70% month-over-month to 40 million, as people sought ways to stay connected during lockdowns. This spike mirrored the growth experienced by competing platforms such as Zoom.
The most recent user update came via a Microsoft blog post in early 2023, announcing an integration between Skype and Bing. It stated that “more than 36 million people use Skype daily for calls and chats” globally.
Ultimately, the contrasting trajectories of Teams’ growth and Skype’s stagnation have led Microsoft to conclude that now is the right time to consolidate its focus.
“Both Skype and Teams saw an uptick during the pandemic, but Skype has remained relatively stable in recent years,” Teper explained. “We felt that user feedback and overall trends indicated that now was the right moment to move forward.”
Phone home Microsoft is urging users to transition to Teams Free, which offers additional features such as calendar integration—not available in Skype. However, it lacks some hallmark Skype features, particularly phone-call functionality, which allowed users to dial mobile and landline numbers or receive calls through a Skype phone number.
Microsoft began phasing out these services in December 2024, preventing users from adding further credit or purchasing Skype numbers. Users could still make calls to phone numbers with an active subscription or any remaining credit, but subscription renewals will cease on April 3.
For legacy users with remaining credit, Microsoft will maintain a Skype Dial Pad within the Skype web portal and Teams for an indefinite period.
“We will continue supporting this functionality as long as users have credit and actively use it,” said Amit Fulay, Microsoft VP of Product, in an interview with TechCrunch.
Although the enterprise version of Teams supports phone calls, Fulay confirmed that Teams Free will not offer public switched telephone network (PSTN) services, citing changes in user behavior.
“We have monitored telephony usage on Skype for some time, and patterns have shifted. People now rely more on mobile data plans, reducing the demand for traditional telephony services,” Fulay said. “This decision reflects those evolving trends.”
System migration During the transition period, Skype users can download the Teams app and log in using their Skype credentials, with all chats and contacts migrating automatically. Skype will remain operational until May 5, 2025.
Alternatively, users can export their data, though options for importing it elsewhere will be limited.
“We want to ensure that users do not lose their contacts or shared memories during this transition,” Fulay said. “For those moving to Teams, we will restore all contacts and data seamlessly.”
If users take no action by May 5, Microsoft will retain their data until the end of the year, after which it will be permanently deleted.
Blurred lines One key takeaway from this transition is the diminishing distinction between business and consumer applications, driven in part by shifting work norms and technological trends.
Skype began as a consumer product that later gained traction in the business sector, while Teams originated as a business tool that has since expanded into the consumer space. Despite this, Teams continues to maintain a professional-oriented brand identity, raising questions about its appeal to casual users.
Teper, however, does not view this as an issue, noting that many Microsoft products already serve both personal and professional purposes.
“We expect a significant number of users to transition from Skype to Teams,” he said. “Look at Word, Excel, and PowerPoint—these tools are widely used in both business and personal contexts. Families use Word for schoolwork and Excel for budgeting. We have a strong precedent for our applications being utilized across different aspects of life.”
FAQs
Who founded Skype? Skype was founded in 2003 by Niklas Zennström from Sweden and Janus Friis from Denmark.
When was Skype launched? Skype was officially launched on August 29, 2003.
Who owns Skype now? Microsoft acquired Skype in May 2011 for $8.5 billion and has owned it since then.
Why is Skype shutting down? Microsoft is retiring Skype to consolidate its focus on Teams, which has seen significant growth in recent years.
Why was Skype originally called “Skyper”?
Skype’s original name was “Skyper,” an abbreviation of “Sky peer-to-peer.” However, the “r” was dropped because the domain “Skyper.com” was already taken.
