Thousands of jobs are to go at Nokia as the handset giant shakes up its core operations going forward
Nokia has announced that it will cut 4,000 jobs from its global workforce, and said it will also outsource its 3,000-plus Symbian developers.
The decision to axe 4,000 Nokia jobs by the end of 2012 is part of an attempt by the Finnish handset giant to cut costs by €1 billion (£887m), as it struggles to regain the initiative in the mobile sector and hold its own against Android and Apple.
Nokia said that the majority of these reductions would take place in Denmark, Finland and the UK. “In accordance with country-by-country legal requirements, discussions with employee representatives started today,” said Nokia.
Another Dark Day
The company added to the shock when it revealed that it would outsource its 3,000 Symbian software developers to IT services giant Accenture.
But the plan is sure to be opposed by unions. Unison has already branded Nokia’s decision to axe 700 jobs in the UK as part of a 7,000 worldwide job shedding exercise as ‘another dark day for the British economy’.
Unite said that it would take part in a concerted campaign to halt the job losses.
“It is not surprising that the company has decided to sneak out this very bad news in the week that the country’s attention is focused on Friday’s royal wedding,” said Tony Burke, Unite assistant general secretary.
“What is very disheartening is that mobile phones and their associated technology are one of the growth areas in the British economy, yet this still does not stop a successful company such as Nokia throwing people out of work,” said Burke.
Radical Shake Up
The job losses indicate the scale of the radical shake-up at Nokia under the leadership of chief executive Stephen Elop.
Nokia is already hard at work developing handsets running Windows Phone 7, which reportedly could arrive later this year.
“At Nokia, we have new clarity around our path forward, which is focused on our leadership across smart devices, mobile phones and future disruptions,” said Elop.
“However, with this new focus, we also will face reductions in our workforce,” Elop added. “This is a difficult reality, and we are working closely with our employees and partners to identify long-term re-employment programmes for the talented people of Nokia.”
Nokia said that it is launching a comprehensive social responsibility programme for staff and the communities likely to be affected by the personnel reductions.
“We are offering those who are losing their jobs a range of options, from individual re-employment support and re-training to making investments to promote innovation and working with a variety of partners to create new opportunities,” Elop continued.
Nokia said that it also plans to consolidate its research and product development sites so that each site has a clear role and mission. “Nokia expects the expansion of some sites and the contraction or closure of others,” said the company.
But perhaps more tellingly, is the Nokia announcement that its plans to outsource its Symbian software operations, and move about 3,000 employees to Accenture.
It had previously hinted that Symbian support would end by 2014.
The Symbian developers being outsourced are located in China, Finland, India, the UK and United States. The two companies expect completion of the final agreement during this summer, and expect to begin “the transition of employees by the end of the calendar year 2011.”
Accenture will also eventually provide mobility software, business and operational services around the Windows Phone platform to Nokia and other ecosystem participants.
“Mobility is a key area for Accenture,” said Marty Cole, chief executive, Accenture Communications and High Tech group. “This collaboration with Nokia will enhance our ability to help clients across multiple industries leverage mobility to advance their business agendas. It is a real win-win for Accenture and Nokia”.
“This collaboration demonstrates our ongoing commitment to enhance our Symbian offering and serve our smartphone customers,” said Jo Harlow, executive VP for Smart Devices, Nokia.
“As we move our primary smartphone platform to Windows Phone, this transition of skilled talent to Accenture shows our commitment to provide our Symbian employees with potential new career opportunities,” said Nokia’s Harlow.