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Devices/smartphones

Nokia Cuts 4,000 Jobs, Sheds Symbian

Nokia Corp. (NYSE: NOK) announced plans on Wednesday to cut 4,000 jobs and outsource its Symbian software activities, including the transfer of 3,000 employees, to Accenture in an effort to reduce operating expenses by €1 billion (US$1.5 billion) in 2013. (See Nokia Outsources Symbian Work to Accenture and Nokia to Cut 4,000 Jobs .)

The move follows the Finnish phone maker’s recent alliance with Microsoft Corp. (Nasdaq: MSFT) and strategic shift to the Windows Phone operating system. (See Nokia Puts Microsoft Strategy Into Action , Nokia Unveils Major Revamp and Symbian Is Dead. Long Live Windows Phone.)

Nokia, which has 65,000 employees worldwide (not including Nokia Networks ), said it plans to cut 4,000 jobs by the end of 2012 and that most of the reductions would be in Denmark, Finland and the U.K.

As part of this cost-reduction process, the company said it also expects to consolidate some of its research and development sites -- closing some facilities while expanding others -- but it did not specify which locations would be affected.

Nokia also said today it will transfer an additional 3,000 employees to Accenture as part of an outsourcing agreement for Symbian software. Accenture will provide Symbian-based software development and support services.

Those 3,000 Nokia employees are expected to be transferred to Accenture by the end of 2011 and are located in China, Finland, India, the U.K. and the U.S. According to the press statement, these employees will initially work on "Symbian software activities for Nokia. Over time, Accenture and Nokia will seek opportunities to retrain and redeploy transitioned employees."

In total, Nokia will shed 7,000 employees from its workforce from the combination of job cuts and outsourcing Symbian to Accenture.

Why this matters
Even after its momentous agreement with Microsoft, Nokia still had to do something drastic, and this is it. These cost-cutting measures partly answer how Nokia was going to lop US$1.5 billion off its operating expenses by 2013. But the lingering question is -- will Nokia have to make deeper cuts?

As for Symbian, by handing over the development responsibility to Accenture, Nokia will be freed up to focus on Windows Phone.

Accenture appears to be as good a home as any for Symbian, considering that the two companies have been working together since 1994. Also, Accenture acquired Nokia’s professional services business in 2009, which provides engineering and support for the Symbian operating system to device manufacturers as well as service providers.

For more
All the details of Nokia’s recent developments can be found right here:

— Michelle Donegan, European Editor, Light Reading Mobile

sarahthomas1011 12/5/2012 | 5:06:37 PM
re: Nokia Cuts 4,000 Jobs, Sheds Symbian

I didn't know you could just give your employees to someone else...but I guess it makes sense given their partnership. Still seems to me they're just prolonging the inevitable - that those Symbian employees get laid off too.

sarahthomas1011 12/5/2012 | 5:06:36 PM
re: Nokia Cuts 4,000 Jobs, Sheds Symbian

That would be the best-case scenario. And, you're probably right, Accenture hires everyone.

paolo.franzoi 12/5/2012 | 5:06:36 PM
re: Nokia Cuts 4,000 Jobs, Sheds Symbian

 


Terms aside, what would happen in practice is that the Nokia employees would get a job offer from Accenture.


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sarahthomas1011 12/5/2012 | 5:06:36 PM
re: Nokia Cuts 4,000 Jobs, Sheds Symbian

And, what are the business terms here? Is Accenture paying Nokia for the employee grab, or is Nokia paying Accenture to take the unit of its hands??

Duh! 12/5/2012 | 5:06:35 PM
re: Nokia Cuts 4,000 Jobs, Sheds Symbian

From the article, it looks like what they'd do in in IT outsourcing agreement.  If that's true, then as I understand it,  Nokia would identify a group and a number of  employees to be outsourced.   Accenture interviews and makes the target number of offers to the ones they want.  Typically with same pay and equivalent grade level,  probably with roughly similar benefits.  Low performing employees or those who don't interview well generally don't make the cut, and stay until the next layoff.  Nokia probably keeps some senior level folks around to manage their side of the contract. 


This is pretty common for IT functions.  I've never heard of it being done for R&D. 

sarahthomas1011 12/5/2012 | 5:06:34 PM
re: Nokia Cuts 4,000 Jobs, Sheds Symbian

Thanks for explaining, Duh!. Sounds reasonable to me. I do think that, regardless of the starting point, they'll end up making some cuts. But, could be a good opportunity for some.

paolo.franzoi 12/5/2012 | 5:06:33 PM
re: Nokia Cuts 4,000 Jobs, Sheds Symbian

Duh!,




Didn't Cadence used to do this kind of buy with R&D for a period of time.


 


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