Nokia will axe 7,000 jobs and outsource its Symbian software to slash 1 billion euros ($1.46 billion) of costs as it struggles to compete in the fierce smartphone market.
Nokia today announced plans to align its global workforce and consolidate site operations. These measures are part of Nokia's target to reduce its Devices & Services non-IFRS operating expenses by 1 billion euros for the full year 2013 in comparison to the full year 2010, as announced last week.
Nokia announced plans to form a strategic collaboration with Accenture that would result in the transfer of Nokia's Symbian software activites, including about 3,000 employees to Accenture.
The collaboration, which is subject to final agreement, calls for Accenture to provide Symbian-based software development and support services. The companies expect completion of the final agreement during summer 2011, and expect the transition of employees by the end of the calendar year 2011.
This collaboration also includes plans for Accenture to provide mobility software, business and operational services around the Windows Phone platform to Nokia and other ecosystem participants. Under the proposed agreement, Accenture would become a preferred partner for Nokia's smartphone development activities, as well as a preferred provider of services.
Accenture and Nokia have been working together since 1994. In October 2009, Accenture acquired Nokia's professional services unit that provides engineering and support of the Symbian operating system to mobile device manufacturers and service providers, and which then served as a key building block in Accenture's Mobility services portfolio.
In addition, Nokia also plans to reduce its global workforce by about 4,000 employees by the end of 2012, with the majority of reductions in Denmark, Finland and the UK.
Nokia also plans to consolidate the company's 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.
All employees affected by the reduction plans can stay on the Nokia payroll through the end of 2011, the company said. Nokia expects personnel reductions to occur in phases until the end of 2012, linked to the roll-out of Nokia's planned product and services portfolio. During this period, Nokia intends to ramp up its capacity for the development of Nokia smartphones based on the Windows Phone platform, the company's mobile phones and its services portfolio.
"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 Stephen Elop, Nokia president and CEO. "However, with this new focus, we also will face reductions in our workforce. This is a difficult reality, and we are working closely with our employees and partners to identify long-term re-employment programs for the talented people of Nokia."